Separate Opinions

BELLOSILLO, J., separate opinion;

We point out at the outset that this Petition for Review which was filed
before the promulgation of St. Martin Funeral Home v. National Labor
Relations Commission,1 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 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 to secure clearance from their office.2
Petitioner Serrano filed with the NLRC Adjudication Office a complaint for
illegal dismissal and underpayment of wages against ISETANN. Efforts at
amicable settlement proved futile. Ms. Cristina Ramos, Personnel
Administration Manager of ISETANN, testified that the security checkers
and their section head were retrenched due to the installation of a
labor saving device, i.e., the hiring of an independent security
agency.
Finding the dismissal to be illegal, the Labor Arbiter ordered the
immediate reinstatement of Serrano to his former or to an equivalent
position plus payment of back wages, unpaid wages, 13th month pay and
attorney's fees.
On appeal the NLRC reversed the Labor Arbiter and ruled that ISETANN
acted within its prerogative when it phased out its Security Section and
retained the services of an independent security agency in order to cut
costs
and
economize.
Upon
denial
of
his
motion
for
reconsideration3 Serrano filed the instant petition imputing grave abuse of
discretion on the part of the NLRC.
Art. 282 of the Labor Code enumerates the just causes for the
termination of employment by the employer: (a) serious misconduct or
willful disobedience by the employee of the lawful orders of his employer
or the latter's representative in connection with the employee's work; (b)
gross and habitual neglect by the employee of his duties; (c) fraud or
willful breach by the employee of the trust reposed in him by his employer
or his duly authorized representative; (d) commission of a crime or
offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representative;
and, (e) other causes analogous to the foregoing.
On the other hand, Arts. 283 and 284 of the same Code enumerate the
so-called authorized causes: (a) installation of labor saving devices; (b)
redundancy: (b) retrenchment to prevent losses; (d) closure or cessation
of the establishment or undertaking unless the closure or cessation is for
the purpose of circumventing the provisions of the law; and, (e) disease.
The Just causes enumerated under Art. 282 of the Labor Code are
provided by the employee who causes the infraction. The authorized

causes are provided by the employer either because of outside factors

such as the general decline in the economy or merely part of its long
range plan for business profitability. Corollarily, in termination for a just
cause, the employee is not entitled to separation pay unlike in termination
for an authorized cause. In addition, the basis in computing the amount of
separation pay varies depending on whether the termination is due to the
installation of a labor saving device, or redundancy, in which case, the
employee is entitled to receive separation pay equivalent to at least one
(1) month pay or to at least one (1) month pay for every year of service.
In case the termination is due to retrenchment in order to prevent losses
or in case of closure or cessation of operation of the establishment or
undertaking not due to serious business losses or financial reverses, the
separation pay is lower, i.e., equivalent to one (1) month pay or at least
one-half month pay for every year of service, whichever is higher. As may
be gleaned from the foregoing, where the cause of termination is for the
financial advantage or benefit of the employer, the basis in computing for
separation pay is higher compared to termination dictated by necessity
with no appreciable financial advantage to the employer.
In the instant case, we agree with the NLRC that the dismissal of
petitioner Serrano was for an authorized cause, i.e., redundancy, which
exists where the services of an employee are in excess of what are
reasonably demanded by the actual requirements of the enterprise. A
position is redundant where it is superfluous, and the superfluity may be
the outcome of other factors such as overhiring of workers, decreased
volume of other business, or dropping of a particular product line or
service activity previously manufactured or undertaken by the enterprise.4
The hiring of an independent security agency is a business decision
properly within the exercise of management prerogative. As such, this
Court is denied the authority to delve into its wisdom although it is
equipped with the power to determine whether the exercise of such
prerogative is in accordance with law. Consequently, the wisdom or
soundness of the management decision is not subject to the discretionary
review of the Labor Arbiter nor of the NLRC unless there is a violation of
law or arbitrariness in the exercise thereof, in which case, this Court will
step in.5 Specifically, we held in International Harvester Macleod, Inc. v.
Intermediate Appellate Court6 that the determination of whether to
maintain or phase out an entire department or section or to reduce
personnel lies with management. The determination of the need for the
phasing out of a department as a labor and cost saving device because it
is no longer economical to retain its services is a management
prerogative.
After having established that the termination of petitioner Ruben
Serrano was for an authorized cause, we now address the issue of
whether proper procedures were observed in his dismissal.
Since the State affords protection to labor under the
Constitution,7 workers enjoy security of tenure and may only be
removed or terminated upon valid reason and through strict observance
of proper procedure.8 Article 279 of the Labor Code specifically provides

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.
Security of tenure however does not guarantee perpetual employment. If
there exists a just or an authorized cause, the employer may terminate
the services of an employee but subject always to procedural
requirements. The employer cannot be legally compelled to have in its
employ a person whose continued employment is patently inimical to its
interest. The law, while affording protection to the employee, does
not authorize the oppression or destruction of his employer.9

Subject then to the constitutional right of workers to security of tenure and

to be protected against dismissal except for a just or authorized cause,
and without prejudice to the requirement of notice under Art. 283 of the
Labor Code, the employer shall furnish the worker whose employment is
sought to be terminated a written notice containing a statement of the
cause of termination and shall afford the latter ample opportunity to be
heard and to defend himself with the assistance of his representative, if
he so desires, in accordance with company rules and regulations
promulgated pursuant to guidelines set by the DOLE.10
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 clearly
violated the provisions of Art. 283 on notice. 11 It did not send a written
notice to DOLE which is essential because the right to terminate an
employee is not an absolute prerogative. The lack of written notice denied
DOLE the opportunity to determine the validity of the termination.
The written notice ISETANN sent to Serrano was dated 11 October 1991
or on the same day the intended termination was to take effect. This
obviously did not comply with the 30-day mandatory requirement.
Although the cause for discharge may be just or authorized, it is still
necessary and obligatory to afford the employee concerned his basic and
more important right to notice. Serrano was not given the chance to make
the needed adjustments brought about by his termination. Significantly,
the notice is intended to enable the employee not only to prepare himself
for the legal battle to protect his tenure of employment, which can be
long, arduous, expensive and complicated by his own standards, but also
to find other means of employment and ease the impact of the loss of his
job and, necessarily, has income.
We are of the view that failure to send notice of termination to Serrano is
not tantamount to violation of his constitutional right to due process but
merely constitutes non-compliance with the provision on notice under Art.
283 of the Labor Code.
The legitimacy of a government is established and its functions
delineated in the Constitution. From the Constitution flows all the powers
of government in the same manner that it sets the limits for their proper
exercise. In particular, the Bill of Rights functions primarily as a deterrent
to any display of arbitrariness on the part of the government or any of its
instrumentalities. It serves as the general safeguard, as is apparent in its
first section which states, "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."12 Specifically, due process is a requirement
for the validity of any governmental action amounting to deprivation of
liberty.13 It is a restraint on state action not only in terms of what it
amounts to but how it is accomplished. Its range thus covers both the
ends sough to be achieved by officialdom as well as the means for their
realization.14
Substantive due process is a weapon that may be utilized to challenge
acts of the legislative body, whether national or local, and presumably
executive orders of the President and administrative orders and
regulations of a rule-making character. Procedural due process, on the
other hand, is available for the purpose of assailing arbitrariness or
unreasonableness in the administration of the law by executive
department or the judicial branch. Procedural due process likewise may
aid those appearing before Congressional committees if the proceedings
are arbitrary or otherwise unfair.13
Procedural due process demands that governmental acts, more
specifically so in the case of the judiciary, not be affected with
arbitrariness.16 The same disinterestedness required of men on the bench
must characterize the actuations of public officials, not excluding the
President, to satisfy the requirements of procedural due process.17
In his dissent Mr. Justice Puno states that "the new majority opinion
limiting violations of due process to government action alone is a
throwback to a regime of law long discarded by more progressive
countries." He opines that "today, private due process is a settled norm in
administrative law," citing Schwartz, an authority in administrative law.

We beg to disagree. A careful reading of Schwartz would reveal that

requirements of procedural due process extended from governmental to
private action only in instances where there is "sufficient governmental
involvement" or "the private action was so saturated with governmental
incidents."
The cardinal primary requirements of due process in administrative
proceedings were highlighted in Ang Tibay v. Court of Industrial
Relations:18 (a) the right to a hearing, which includes the right to present
one's case and submit evidence in support thereof; (b) the tribunal must
consider the evidence presented; (c) the decision must have something
to support itself; (d) the evidence must be substantial; (e) 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; (f) 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; (g) the board or body should, in all
controversial questions, render its decision in such manner that the
parties to the proceeding may know the various issues involved, and the
reason for the decision rendered.
Also in Lumiqued v. Exevea19 it was held
In administrative proceedings, the essence of due process is
simply the opportunity to explain one's side. One may be
heard, not solely by verbal presentation but also, and perhaps
even more creditably as it is more practicable than oral
arguments, through pleadings. An actual hearing is not always
an indispensable aspect of due process. As long as a party
was given the opportunity to defend his interests in due course,
he cannot be said to have been denied due process of law, for
this opportunity to be heard is the very essence of due process.
From the foregoing, it is clear that the observance of due process is
demanded in governmental acts. Particularly in administrative
proceedings, due process starts with the tribunal or hearing officer and
not with the employer. In the instant case, what is mandated of the
employer to observe is the 30-day notice requirement. Hence, nonobservance of the notice requirement is not denial of due process but
merely a failure to comply with a legal obligation for which we 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
required 30-day notice, he was nevertheless given and, in fact, took
advantage of every opportunity to be heard, first, by the Labor Arbiter,
second, by the NLRC, and third, by no less than this Court. Before the
Labor Arbiter and the NLRC, petitioner had the opportunity to present his
side not only orally but likewise through proper pleadings and position
papers.
It is not correct therefore to say that petitioner was deprived of his right to
due process.
We have consistently upheld in the past as valid although irregular
the dismissal of an employee for a just or authorized cause but without
notice and have imposed a sanction on the erring employers in the form
of damages for their failure to comply with the notice requirement. We
discussed the rationale behind this ruling in Wenphil Corporation v.
NLRC20 thus
The Court holds that the policy of ordering reinstatement to the
service of an employee without loss of seniority and the
payment of his wages during the period of his separation until
his actual reinstatement but not exceeding three years without
qualification or deduction, when it appears he was not afforded
due process, although his dismissal was found to be for just
and authorized cause in an appropriate proceeding in the
Ministry of Labor and Employment should be re-examined. It
will be highly prejudicial to the interests of the employer to
impose on him the services of an employee who has been
shown to be guilty of the charges that warranted his dismissal

from employment. Indeed, it will demoralize the rank and file if

the undeserving, if not undesirable, remains in the service . . . .
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 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 (emphasis supplied).
In Sebuguero v. National Labor Relations Commission21 Mr. Justice
Davide Jr., now Chief Justice, made this clear pronouncement
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 be upheld but the employer must be
sanctioned for non-compliance with the requirements of or for
failure to observe due process. The sanction, in the nature of
indemnification or penalty, depends on the facts of each case
and the gravity of the omission committed by the employer.
This ruling was later ably amplified by Mr. Justice Puno in Nath v.
National Labor Relations Commission22 where he wrote
The rules require the employer to furnish the worker sought to
be dismissed with two written notices before termination of
employment can be legally effected: (1) notice which apprises
the employee of the particular acts or omissions for which his
dismissal is sought; and (2) the subsequent notice which
informs the employee of the employer's decision to dismiss
him. In the instant case, private respondents have failed to
furnish petitioner with the first of the required two (2) notices
and to state plainly the reasons for the dismissal in the
termination letter. Failure to comply with the requirements taints
the dismissal with illegality.
Be that as it may, private respondent can dismiss petitioner for
just cause . . . . We affirm the finding of the public respondent
that there was just cause to dismiss petitioner, a probationary
employee (emphasis supplied).
Also, in Camua v. National Labor Relations Commission 23 this Court
through Mr. Justice Mendoza decreed
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. . . . Accordingly, in
accordance with the well-settled rule, private respondents
should pay petitioner P1,000.00 as indemnity for violation of his
right to due process . . . . Although an employee validy
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 (emphasis
supplied).
Non-observance of this procedural requirement before would cause the
employer to be penalized by way of paying damages to the employee the
amounts of which fluctuated through the years. Thus, for just cause the
indemnity ranged from P1,000.00 to P10,000.00. 24 For authorized cause,
as distinguished from just cause, the award ranged from P2,000.00 to
P5,000.00.25
This Court has also sanctioned the ruling that a dismissal for a just or
authorized cause but without observance of the mandatory 30-day notice
requirement was valid although considered irregular. The Court

ratiocinated that employers should not be compelled to keep in their

employ undesirable and undeserving laborers. For the irregularity, i.e.,
the failure to observe the 30-day notice of termination, the employer was
made to pay a measly sum ranging from P1,000.00 to P10,000.00.
With regard to the indemnity or penalty, which we prefer seriously to be
referred to as "disturbance compensation," the Court has awarded
varying amounts depending on the circumstances of each case and the
gravity of the commission. We now propose that the amount of the award
be uniform and rational and not arbitrary. The reason for the proposal or
modification is that in their non-compliance with the 30-day notice
requirement the erring employers, regardless of the peculiar
circumstances of each case, commit the infraction only by the single act
of not giving any notice to their workers. It cannot be gainfully said that
the infraction in one case is heavier than in the other as the nonobservance constitutes one single act. Thus, if the dismissal is illegal, i.e.
there is no just or authorized cause, a disturbance compensation in the
amount of P10,000.00 may be considered reasonable. If the dismissal is
for a just cause but without notice, a disturbance compensation in the
amount P5,000.00 may be given. In termination for an authorized cause
and the notice requirement was not complied with, we distinguish further:
If it is to save the employer from imminent bankruptcy or business losses,
the disturbance compensation to be given is P5,000.00. If the authorized
cause was intended for the employer to earn more profits, the amount of
disturbance
compensation
is
P10,000.00.
This
disturbance
compensation, again we strongly recommend, should be given to the
dismissed employee at the first instance, the moment it is shown that his
employer has committed the infraction of not complying with the 30day written notice requirement to tide him over during his economic
dislocation.
The right of the laborers to be informed of their impending termination
cannot be taken lightly, and the award of any amount below P5,000.00
may be too anemic to satisfy the fundamental protection especially
accorded to labor and the workingman. In fact, it is hardly enough to
sustain a family of three; more so if the employee has five or more
children, which seems to be the average size of a Filipino family.
Henceforth, if the dismissal is for a just cause but without observance of
the 30-day notice requirement, the dismissal is deemed improper and
irregular. If later the dismissal is ascertained to be without just cause, the
dismissed employee is entitled to reinstatement, if this be feasible,
otherwise to separation pay and back wages plus disturbance
compensation of P10,000.00 and moral damages, if warranted. On the
other hand, if the dismissal is ascertained to be with just cause, the
dismissed employee is entitled nevertheless to a disturbance
compensation of P5,000.00 if the legal requirement of the 30-day notice
to both employee and DOLE has not been complied with.
In instances where there is obviously a ground for dismissal, as when the
employee has become violent and his presence would cause more harm
to his co-workers and the security and serenity of the workplace, the
employee may be suspended in the meantime until he is heard with
proper observance of the 30-day notice requirement. Likewise, if the
dismissal is for an authorized cause but without the required notice, the
dismissal is improper and irregular and the employee should be paid
separation pay, back wages and disturbance compensation of P5,000.00
or P10,000.00.00 depending on the cause. As already intimated, if the
authorized cause is for the purpose of saving the employer from imminent
bankruptcy or business losses, the disturbance compensation should be
P5,000.00; otherwise, if the authorized cause is for the employer, in the
exercise of management prerogative, to save and earn more profits, the
disturbance compensation should be P10,000.00.
In the instant case, Serrano was given his walking papers only on the
very same day his termination was to take effect. DOLE was not served
any written notice. In other words, there was non-observance of the 30day notice requirement to both Serrano and the DOLE. Serrano was thus
terminated for an authorized cause but was not accorded his right to 30day notice. Thus, his dismissal being improper and irregular, he is entitled
to separation pay and back wages the amounts of which to be
determined by the Labor Arbiter, plus P10,000.00 as disturbance
compensation which, from its very nature, must be paid immediately to
cushion the impact of his economic dislocation.

One last note. This Separate Opinion is definitely not advocating a new
concept in imposing the so-called "disturbance compensation."
Since Wenphil Corporation v. NLRC 26 this Court has already recognized
the necessity of imposing a sanction in the form of indemnity or even
damages, when proper, not specifically provided by any law, upon
employers who failed to comply with the twin-notice requirement. At the
very least, what is being proposed to be adopted here is merely a change
in the terminology used, i.e., from "sanction," "indemnity," "damages" or
"penalty," to "disturbance compensation" as it is believed to be the more
appropriate term to accurately describe the lamentable situation of our
displaced employees.

(a) Serious misconduct or willful disobedience by the

employee of the lawful orders of his employer or
representative in connection with his work;

Indeed, from the time the employee is dismissed from the service without
notice in this case since 11 October 1991 to the termination of his
case, assuming it results in his reinstatement, or his being paid his back
wages and separation pay, as the case may be, how long must he be
made to suffer emotionally and bear his financial burden? Will reinstating
him and/or paying his back wages adequately make up for the entire
period that he was indistress for want of any means of livelihood?
Petitioner Serrano has been deprived of his only source of income his
employment for the past eight (8) years or so. Will his reinstatement
and/or the payment of his back wages and separation pay enable him to
pay off his debts incurred in abject usury to which he must have
succumbed during his long period of financial distress? Will it be
adequate? Will it be just? Will it be fair? Thus, do we really and truly
render justice to the workingman by simply awarding him full back wages
and separation pay without regard for the long period during which he
was wallowing in financial difficulty?

(d) Commission of the 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

FOR ALL THE FOREGOING, the Decision of respondent National Labor

Relations Commission should be MODIFIED. The termination of
petitioner RUBEN SERRANO being based on an authorized cause
should be SUSTAINED AS VALID although DECLARED IRREGULAR for
having been effected without the mandatory 30-day notice.
ISETANN DEPARTMENT STORE INC. should PAY petitioner SERRANO
back wages and separation pay the amounts of which to be determined
by the Labor Arbiter, plus P10,000.00 as disturbance compensation which
must be paid immediately. Consequently, except as regards the
disturbance compensation, the case should be REMANDED to the Labor
Arbiter for the immediate computation and payment of the back wages
and separation pay due petitioner.
EXCEPT as herein stated, I concur with the majority.

PUNO, J., dissenting opinion;

The rule of audi alteram partem hear the other side, is the essence of
procedural due process. That a "party is not to suffer in person or in purse
without an opportunity of being heard" is the oldest established principle
in administrative law.1 Today, the majority is relies that the all important
right of an employee to be notified before he is dismissed for a just or
authorized cause is not a requirement of due process. This is a blow on
the breadbasket of our lowly employees, a considerable erosion of their
constitutional right to security of tenure, hence this humble dissenting
opinion.
A review of our law on dismissal is in order.
I. DISMISSAL DUE TO JUST CAUSE
The law allowing dismissal of an employee due to a just cause is
provided in Article 282 of the Labor Code:
Art. 282. Termination by employer. An employer may
terminate an employment for any of the following causes:

(b) Gross and habitual neglect by the employee of

his duties;
(c) Fraud or willful breach by the employee of the
trust reposed in him by his employer or duly
authorized representative;

(e) Other causes analogous to the foregoing.

The long established jurisprudence2 is that to justify dismissal of an
employee for a just cause, he must be given two kinds of notice by his
employer, viz: (1) notice to apprise the employee of the particular acts or
omissions for which the dismissal is sought, and (2) subsequent notice to
inform him of the employer's decision to dismiss him. Similarly, deeply
ingrained is our ruling that these pre and post notice requirements are not
mere technicalities but are requirements of due process.3
Then came the case of Wenphil Corporation vs. NLRC and Mallare in
1989.4 It is the majority view that Wenphil reversed the long standing
policy of this Court on dismissal. This is too broad a reading of Wenphil. A
careful statement of the facts of Wenphil and the ruling of this Court is
thus proper.
First, the facts. The private respondent Roberto Mallare is the assistant
head of the backroom department of petitioner Wenphil Corporation. At
about 2:30 pm on May 20, 1985, Mallare had an altercation with his coemployee, Job Barrameda, about tending the Salad Bar. He slapped
Barrameda's cap, stepped on his foot, picked up an ice scooper and
brandished it against the latter. He refused to be pacified by another
employee who reported the incident to Delilah Hermosura, assistant
manager. Hermosura summoned Mallare but the latter refused to see the
former. It took a security guard to bring Mallare to Hermosura. Instead of
making an explanation, Mallare shouted profane words against
Hermosura. He declared that their altercation should only be settled by
him and Barrameda.
The following morning, Mallare was suspended. In the afternoon, he was
dismissed from the service. He received an official notice of his dismissal
four (4) days later.
Mallare filed with the Labor Arbiter a complaint for illegal suspension,
illegal dismissal and unfair labor practice. No hearing was conducted in
view of the repeated absence of the counsel of Mallare. The parties
submitted their respective position papers. On December 3, 1986, the
Arbiter denied the complaint as he found Mallare guilty of grave
misconduct and insubordination, which are just causes for dismissal. The
Arbiter also ruled that Mallare was not denied due process. On appeal,
the NLRC reversed. It held that Mallare was denied due process before
he was dismissed. It ordered Mallare's reinstatement and the payment of
his one (1) year backwages.
On certiorari to this Court, we reversed the NLRC and reinstated the
decision of the Arbiter with the modification that petitioner should pay to
Mallare an indemnity of P1,000.00 for dismissing Mallare without any
notice and hearing. We held:
Petitioner insists that private respondent was afforded due
process but he refused to avail of his right to the same; that
when the matter was brought to the labor arbiter he was able to
submit his position paper although the hearing cannot proceed
due to the non-appearance of his counsel; and that the private
respondent is guilty of serious misconduct in threatening or

coercing a co-employee which is a ground for dismissal under

Article 283 of the Labor Code.
The failure of petitioner to give private respondent the benefit of
a hearing before he was dismissed constitutes an infringement
of his constitutional right to due process of law and equal
protection of the laws. The standards of due process in judicial
as well as administrative proceedings have long been
established. In its bare minimum due process of law simply
means giving notice and opportunity to be heard before
judgment is rendered.
The claim of petitioner that a formal investigation was not
necessary because the incident, which gave rise to the
termination of private respondent, was witnessed by his coemployees and supervisors, is without merit. The basic
requirement of due process is that which hears before it
condemns, which proceeds upon inquiry and renders judgment
only after trial.
However, it is a matter of fact that when the private respondent
filed a complaint against petitioner, he was afforded the right to
an investigation by the labor arbiter. He presented his position
paper as did the petitioner. If no hearing was had, it was the
fault of private respondent as his counsel failed to appear at
the scheduled hearings. The labor arbiter concluded that the
dismissal of private respondent was for just cause. He was
found guilty of grave misconduct and insubordination. This is
borne by the sworn statements of witnesses. The Court is
bound by this finding of the labor arbiter.
By the same token, the conclusion of the public respondent
NLRC on appeal that private respondent was not afforded due
process before he was dismissed is binding on this Court.
Indeed, it is well taken and supported by the records. However,
it can not justify a ruling that private respondent should be
reinstated with back wages as the public respondent NLRC so
decreed. Although belatedly, private respondent was afforded
due process before the labor arbiter wherein the just cause of
his dismissal had been established. With such finding, it would
be arbitrary and unfair to order his reinstatement with back
wages.
Three member of the Court filed concurring and dissenting opinions.
Madam Justice Herrera opined that: (a) Mallare was dismissed for cause,
hence, he is not entitled to reinstatement and backwages; (b) he was not
denied due process; and (c) he has no right to any indemnity but to
separation pay to cushion the impact of his loss of employment Mr.
Justice Padilla took the view that: (1) Mallare was not entitled to
reinstatement and backwages as he was guilty of grave misconduct and
insubordination; (2) he was denied administrative due process; and (3)
for making such denial, Wenphil should pay "separation pay (instead of
indemnity) in the sum of P1,000.00." Madam Justice Cortes held that: (1)
Mallare was not illegally dismissed; (2) he was not denied due process;
(3) he was not entitled to indemnity; and (4) if P1,000.00 was to be
imposed on Wenphil as an administrative sanction, it should form part of
the public fund of the government.
I shall discuss later that Wenphil did not change our ruling that violation of
the pre-dismissal notice requirement is an infringement of due process.
II. DISMISSAL DUE TO AUTHORIZED CAUSE
The applicable law on dismissal due to authorized cause is Article 283 of
the Labor Code which provides:

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
establishment or undertaking not due to serious business
losses or financial reverses, the separation pay shall be
equivalent to one (1) month pay or at least one-half (1/2) month
pay for every year of service, whichever is higher. A fraction of
at least six (6) months shall be considered one (1) whole year.
In Sebuguero v. NLRC,5 we held thru our esteemed Chief Justice Davide
that "the requirement of notice to both the employees concerned and the
Department of Labor and Employment (DOLE) is mandatory and must be
written and given at least one month before the intended date of
retrenchment." We explained that the "notice to the DOLE is essential
because the right to retrench is not an absolute prerogative of an
employer but is subject to the requirement of law that retrenchment be
proved to prevent losses. The DOLE is the agency that will determine
whether the planned retrenchment is justified and adequately supported
by fact."6 Nonetheless, we ruled:
The lack of written notice to the petitioners and to the DOLE
does not, however, make the petitioners' retrenchment illegal
such that they are entitled to the payment of back wages and
separation pay in lieu of reinstatement as they contend. Their
retrenchment, for not having been effected with the required
notices, is merely defective. In those cases where we found the
retrenchment to be illegal and ordered the employees'
reinstatement and the payment of backwages, the validity of
the cruse for retrenchment, that is the existence of imminent or
actual serious or substantial losses, was 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.1wphi1.nt
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 be upheld but
the employer must be sanctioned for non-compliance with the
requirements of or for failure to observe due process. The sanction, in the
nature of indemnification or penalty, depends on the facts of each case
and the gravity of the omission committed by the employer and has
ranged from P1,000.00 as in the cases of Wenphil vs. National Labor
Relations Commission, Seahorse Maritime Corp. v. National Labor
Relations Commission, Shoemart, Inc. vs. National Labor Relations
Commission, Rubberworld (Phils.) Inc. vs. National Labor Relations
Commission, Pacific Mills, Inc. vs. Alonzo, and Aurelio vs. National Labor
Relations Commission to P10,000.00 in Reta vs. National Labor
Relations Commission and Alhambra Industries, Inc. vs. National Labor
Relations Commission. More recently, in Worldwide Papermills, Inc. vs.
National Labor Relations Commission, the sum of P5,000.00 was
awarded to the employee as indemnification for the employer's failure to
comply with the requirements of procedural due process.
Accordingly, we affirm the deletion by the NLRC of the award of back
wages, But because the required notices of the petitioners' retrenchment
were not served upon the petitioners and the DOLE, GTI must be
sanctioned for such failure and thereby required to indemnify each of the
petitioners the sum of P20,000.00 which we find to be just and
reasonable under the circumstances of this case.
III. RE-EXAMINATION OF THE WENPHIL DOCTRINE:

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 serving 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

FROM BAD TO WORSE

The minority of the Court has asked for a re-examination of Wenphil
because as the majority correctly observed, "the number of cases
involving dismissals without the requisite notice to the employee although

effected for just or authorized causes suggests that the imposition of fine
for violation of the notice requirement has not been effective in deterring
violations of the notice requirement."
We must immediately set Wenphil in its proper perspective as it is a very
exceptional case. Its doctrine must be limited to its distinct facts. Its facts
therefore ought to be carefully examined again. In Wenphil, it was clearly
established that the employee had a violent temper, caused trouble
during office hours and even defied his superiors as they tried to pacify
him. The employee was working for a fast food chain that served the
public and where violence has no place. These facts were established
only in the proceedings before the Labor Arbiter after the employee filed a
complaint for illegal dismissal. There were no formal investigation
proceedings before the employer as the employment was dismissed
without any notice by the employer. Given these facts, we ruled that the
pre-dismissal notice requirement was part of due process; nonetheless,
we held that the employee was given due process as he was heard by
the Labor Arbiter; we found that the proceedings before the Labor Arbiter
proved that the employer was guilty of grave misconduct and
insubordination; we concluded with the rule that it would be highly
prejudicial to the interest of the employer to reinstate the employee, but
the employer must indemnify the employee the amount of P1,000.00 for
dismissing him without notice. We further held that "the measure of this
award depends on the facts or each case and the gravity of the omission
committed by the employer."7
At the outset, I wish to emphasize that Wenphil itself held, and repeatedly
held that "the failure of petitioner to give private respondent the benefit of
a hearing before he was dismissed, constitutes an infringement of his
constitutional right to due process of law and equal protection of the laws.
The standards of due process of law in judicial as well as administrative
proceedings have long been established. In its bare minimum due
process of law simply means giving notice and opportunity to be heard
before judgment is rendered."8 The Court then satisfied itself with this
bare minimum when it held that the post dismissal hearing before the
Labor Arbiter was enough compliance with demands of due process and
refused to reinstate an eminently undesirable employee. Heretofore, the
Court was far from satisfied with this bare minimum as it strictly imposed
on an employer compliance with the requirement of pre-dismissal notice,
violation of which resulted in orders of reinstatement of the dismissed
employee. This is the only wrinkle wrought by Wenphil in our
jurisprudence on dismissal. Nonetheless, it should be stressed that the
Court still punished Wenphil's violation of the pre-dismissal notice
requirement as it was ordered to pay an indemnity of P1,000.00 to the
employee. The indemnity was based on the iterated and reiterated rule
that "the dismissal of an employee must be for just or authorized cause
and after due process."9

FIRST. I would like to emphasize that one undesirable effect of Wenphil is

to compel employees to seek relief against illegal dismissals with the
DOLE whereas before, a remedy can be sought before the employer. In
shifting this burden, an employee's uneven fight against his employer has
become more uneven. Now, an illegally dismissed employee often goes
to the DOLE without an exact knowledge of the cause of his dismissal. As
a matter of strategy, some employers today dismiss employees without
notice. They know that it is more advantageous for them to litigate with an
employee who has no knowledge of the cause of dismissal. The
probability is that said employee will fail to prove the illegality of his
dismissal. All that he can prove is that he was dismissed without notice
and the penalty for the omission is a mere fine, a pittance.
The case at bar demonstrates how disastrous Wenphil has been to our
helpless employees. In holding that the petitioner failed to prove his
cause of action, the majority held ". . . we have only the bare assertion of
petitioner that, in abolishing the security section, private respondent's real
purpose was to avoid payment to the security checkers of the wage
increases provided in the collective bargaining agreement approved in
1990." The bare assertion of the petitioner is understandable. The notice
given to him spoke of a general ground retrenchment. No details were
given about the employer's sudden retrenchment program. Indeed, the
employee was dismissed on the day he received the notice in violation of
the 30-day requirement. He was given no time, no opportunity to
ascertain and verify the real cause of his dismissal. Thus, he filed with the
DOLE a complaint for illegal dismissal with a hazy knowledge of its real
cause. Heretofore, it is the employer whom we blame and penalize if he
does not notify his employee of the cause of his dismissal. Today, the
majority puts the blame on the employee for not knowing why he was
dismissed when he was not given any notice of dismissal. In truth, the
suspicion of the petitioner in the case at bar that he was dismissed to
avoid payment of their wage increases is not without basis. The DOLE
itself found that petitioner has unpaid wages which were ordered to be
paid by the employer. The majority itself affirmed this finding.
What hurts is that while the majority was strict with the petitioneremployee, it was not so with the employer ISETANN. Immediately, it
validated the finding of the NLRC that petitioner was dismissed due to the
redundancy of his position. This is inconsistent with the finding of the
Labor Arbiter that the employer failed to prove retrenchment, the ground it
used to dismiss the petitioner. A perusal of the records will show that Ms.
Cristina Ramos, Personnel Administration Manager of the employer
ISETANN testified on the cause of dismissal of the petitioner. She
declared that petitioner was retrenched due to the installation of a labor
saving device. Allegedly, the labor saving device was the hiring of an
independent security agency, thus:10
xxx

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
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
employees.
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 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

Atty. Perdigon:
You said that your company decided to phase out the position
of security checkers . . .
Ms. Ramos:
Yes Sir.
Q: And instead hired the services of a security agency?
A: Yes, sir.
xxx

xxx

xxx

Q: Did you not retrench the position of security checkers?

A: We installed a labor saving device.
Q: So you did not retrench?

A: No. sir.

consider the dismissal or termination to be simply ineffectual for failure of

the employer to comply with the procedure for dismissal or termination.

Q: How about the position of Section Head of Security

Department?
A: It was abolished in 1991.
xxx

xxx

xxx

Q: Are you aware of the retrenchment program of the company

as stated in this letter?
A: Actually it's not a retrenchment program. It's an installation
of a labor saving device.
Q: So you are telling this Court now that there was no
retrenchment program?
A: It was actually an installation
device (emphasis supplied).
xxx

xxx

of

labor

saving

xxx

Q: . . . What (is) this labor saving device that you are referring
to?
A: The labor saving device is that the services of a security
agency were contracted to handle the services of the security
checkers of our company.
Q: Are you sure of what labor saving means, Madam witness?
A: Yes, sir.
Q: You said you installed a labor saving device, and you
installed a security agency as a labor saving device?

With due respect, I find it most difficult to follow the logic of the majority.
Before Wenphil, we protected employees with the ruling that dismissals
without prior notice are illegal and the illegally dismissed employee must
be reinstated with backwages. Wenphil diluted that rule when it held that
due process is satisfied if the employee is given the opportunity to be
heard by the Labor Arbiter. It further held that an employee cannot be
reinstated if it is established in the hearing that his dismissal is for a just
cause. The failure of the employer to give a pre-dismissal notice is only to
be penalized by payment of an indemnity. 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
employee's mandatory right to notice before dismissal. It is disquieting,
however, that the majority re-arranged this balance of right by tilting it
more in favor of the employer's right to dismiss. Thus, instead of
weakening a bit the right to dismiss of employers, the majority further
strengthens it by insisting that a dismissal without prior notice is merely
"ineffectual" and not illegal.
The stubborn refusal of the majority to appreciate the importance of predismissal notice is difficult to understand. It is the linchpin of an
employee's right against an illegal dismissal. The notice tells him the
cause of his 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 give an employee a distinct, different and effective first level of
remedy to protect his job. In the event the employee is dismissed, he can
still file a complaint with the DOLE with better knowledge of the cause of
his dismissal, with longer time to prepare his case, and with greater
opportunity to take care of the financial needs of his family pendente lite.
The majority has taken away from employees this effective remedy. This
is not to say that the pre-dismissal notice requirement equalizes the fight
between an employee and an employer for the fight will remain unequal.
This notice requirement merely gives an employee a fighting chance but
that fighting chance is now gone.

A: We hired the services of a security agency.

Q: So according to you . . . a security agency is a labor saving
device?
Atty. Salonga:
Already answered, your Honor.
Obviously, Ms. Ramos could not even distinguish between retrenchment
and redundancy. The Labor Arbiter thus ruled that petitioner's dismissal
was illegal. The NLRC, however, reversed. The majority affirmed the
NLRC ruling that ISETANN's phase out of its security employees is a
legitimate business decision, one that is necessary to obtain reasonable
return from its investment. To use the phrase of the majority, this is a
"bare assertion." Nothing in the majority decision shows how the return of
ISETANN's investment has been threatened to justify its so-called
business decision as legitimate.
SECOND. The majority holds that "the need is for a rule which, while
recognizing the employee's right to notice before he is dismissed or laid
off, at the same time acknowledges the right of the employer to dismiss
for any of the just causes enumerated in Art. 282 or to terminate
employment for any of the authorized causes mentioned in Arts. 283-284.
If the Wenphil rule imposing a fine on an employer who is found to have
dismissed an employee for cause without prior notice is deemed
ineffective in deterring employer violations of the notice requirement, the
remedy is not to declare the dismissal void if there are just or valid
grounds for such dismissal or if the termination is for an authorized
cause. That would be to uphold the right of the employee but deny the
right of the employer to dismiss for cause. Rather, the remedy is to

It is equally puzzling why the majority believes that restoring the

employee's right to pre-dismissal notice will negate the right of an
employer to dismiss for cause. The 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. Employees in the public sector
cannot be dismissed without prior notice. Equal protection of law
demands similar treatment of employees in the private sector.
THIRD. The case at bar specifically involves Article 283 of the Labor
Code which lays down four (4) authorized causes for termination of
employment.11 These authorized causes are: (1) installation of laborsaving devices; (2) redundancy; (3) retrenchment to prevent losses; and
(4) closing or cessation of operation of the establishment or undertaking
unless the closing is for the purpose of circumventing the law. It also
provides that prior to the dismissal of an employee for an authorized
cause, the employer must send two written notices at least one month
before the intended dismissal one notice to the employee and another
notice to the Department of Labor and Employment (DOLE). We have
ruled that the right to dismiss on authorized causes is not an absolute
prerogative of an employer.12 We explained that the notice to the DOLE is
necessary to enable it to ascertain the truth of the cause of
termination.13 The DOLE is equipped with men and machines to
determine whether the planned closure or cessation of business or
retrenchment or redundancy or installation of labor saving device is
justified by economic facts.14 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 of the retrenchment or

redundancy before the DOLE.15 In addition, this notice requirement gives

an employee a little time to adjust to his joblessness.16
The majority insists that if an employee is laid off for an authorized cause
under Article 283 in violation of the prior notice requirement, his dismissal
should not be considered void but only ineffectual. He shall not be
reinstated but paid separation pay and some backwages. I respectfully
submit that an employee under Article 283 has a stronger claim to the
right to a pre-dismissal notice and hearing. To begin with, he is an
innocent party for he has not violated any term or condition of his
employment. Moreover, an employee in an Article 283 situation may lose
his job simply because of his employer's desire for more profit. Thus, the
installation of a labor saving device is an authorized cause to terminate
employment even if its non-installation need not necessarily result in an
over-all loss to an employer possessed by his possessions. In an Article
283 situation, it is easy to see that there is a greater need to scrutinize
the allegations of the employer that he is dismissing an employee for an
authorized cause. The acts involved here are unilateral acts of the
employer. Their nature requires that they should be proved by the
employer himself. The need for a labor saving device, the reason for
redundancy, the cause for retrenchment, the necessity for closing or
cessation of business are all within the knowledge of the employer and
the employer alone. They involve a constellation of economic facts and
factors usually beyond the ken of knowledge of an ordinary employee.
Thus, the burden should be on the employer to establish and justify these
authorized causes. Due to their complexity, the law correctly directs that
notice should be given to the DOLE for it is the DOLE more than the lowly
employee that has the expertise to validate the alleged cause in an
appropriate hearing. In fine, the DOLE provides the equalizer to the
powers of the employer in an Article 283 situation. Without the equalizing
influence of DOLE, the employee can be abused by his employer.
Further, I venture the view that the employee's right to security of tenure
guaranteed in our Constitution calls for a pre-dismissal notice and
hearing rather than a post facto dismissal hearing. The need for an
employee to be heard before he can be dismissed cannot be
overemphasized. As aforestated, in the case at bar, petitioner was a
regular employee of ISETANN. He had the right to continue with his
employment. The burden to establish that this right has ceased is with
ISETANN, as petitioner's employer. In fine, ISETANN must be the one to
first show that the alleged authorized cause for dismissing petitioner is
real. And on this factual issue, petitioner must be heard. Before the
validity of the alleged authorized cause is established by ISETANN, the
petitioner cannot be separated from employment. This is the simple
meaning of security of tenure. With due respect, the majority opinion will
reduce this right of our employees to a mere illusion. It will allow the
employer to dismiss an employee for a cause that is yet to be
established. It tells the employee that if he wants to be heard, he can file
a case with the labor arbiter, then the NLRC, and then this Court. Thus, it
unreasonably shifts the burden to the employee to prove that his
dismissal is for an unauthorized cause.

an outsider, made to apply for the job, and given a stringent examination
which he failed. Petitioner was booted out and given no chance to contest
his dismissal. Neither was the DOLE given the chance to check whether
the dismissal of petitioner was really for an authorized cause. All these
because ISETANN did not follow the notice and hearing requirement of
due process.
FOURTH. The majority has inflicted a most serious cut on the job security
of employees. The majority did nothing to restore the pre-Wenphil right of
employees but even expanded the right to dismiss of employer by holding
that the pre-dismissal notice requirement is not even a function of due
process. This seismic shift in our jurisprudence ought not to pass.
The key to the new majority ruling 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." The main reason alleged is that "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 settled usage of civilized society."
There can be no room for disagreement on the proposition that the due
process clause found in the Bill of Rights of the Constitution is a limitation
on governmental powers. Nor can there be any debate that acts of
government violative of due process are null and void. Thus, former Chief
Justice
Roberto
Concepcion
emphasized
in Cuaycong
v. Senbengco 17 that ". . . acts of Congress as well as those of the
Executive, can deny due process only under pain of nullity, and judicial
proceedings suffering from the same flaw are subject to the same
sanction, any statutory provision to the contrary notwithstanding." With
due respect to the majority, however, I part ways with the majority in its
new ruling that the due process requirement does not apply to the
exercise of private power. This overly restrictive majority opinion will sap
the due process right of employees of its remaining utility. Indeed, the
new majority opinion limiting violations of due process to government
action alone is a throwback to a regime of law long discarded by more
progressive countries. Today, private due process is a settled norm in
administrative law. Per Schwartz, a known authority in the field, viz:18
Private Due Process

The pernicious effects of the majority stance are self-evident in the case
at bar. For one, petitioner found himself immediately jobless and without
means to support his family. For another, petitioner was denied the right
to rely on the power of DOLE to inquire whether his dismissal was for a
genuine authorized cause. This is a valuable right for all too often, a lowly
employee can only rely on DOLE's vast powers to check employer
abuses on illegal dismissals. Without DOLE, poor employees are preys to
the claws of powerful employers. Last but not the least, it was the
petitioner who was forced to file a complaint for illegal dismissal. To a
jobless employee, filing a complaint is an unbearable burden due to its
economic cost. He has to hire a lawyer and defray the other expenses of
litigation while already in a state of penury. At this point, the hapless
employee is in a no win position to fight for his right. To use a local adage,
"aanhin pa ang damo kung patay na ang kabayo."

As already stressed, procedural due process has proved of an

increasingly encroaching nature. Since Goldberg v. Kelly, the
right to be heard has been extended to an ever-widening area,
covering virtually all aspects of agency action, including those
previously excluded under the privilege concept. The
expansion of due process has not been limited to the traditional
areas of administrative law. We saw how procedural rights
have expanded into the newer field of social welfare, as well as
that of education. But due process expansion has not been
limited to these fields. The courts have extended procedural
protections to cases involving prisoners and parolees, as well
as the use of established adjudicatory procedures. Important
Supreme Court decisions go further and invalidate prejudgment
wage garnishments and seizures of property under replevin
statutes where no provision is made for notice and hearing. But
the Court has not gone so far as to lay down an inflexible rule
that due process requires an adversary hearing when an
individual may be deprived of any possessory interest, however
brief the dispossession and however slight the monetary
interest in the property. Due process is not violated where state
law requires, as a precondition to invoking the state's aid to
sequester property of a defaulting debtor, that the creditor
furnish adequate security and make a specific showing of
probable cause before a judge.

In the case at bar, the job of the petitioner could have been saved if
DOLE was given notice of his dismissal. The records show that petitioner
worked in ISETANN as security checker for six (6) years. He served
ISETANN faithfully and well. Nonetheless, in a desire for more profits,
and not because of losses, ISETANN contracted out the security work of
the company. There was no effort whatsoever on the part of ISETANN to
accommodate petitioner in an equivalent position. Yet there was the
position of Safety and Security Supervisor where petitioner fitted like a
perfect T. Despite petitioner's long and loyal service, he was treated like

In addition, there has been an extension of procedural due

process requirements from governmental to private action. In
Section 5.16 we saw that Goldberg v. Kelly has been extended
to the eviction of a tenant from a public housing project. The
courts have not limited the right to be heard to tenants who
have governmental agencies as landlords. Due process
requirements also govern acts by "private" landlords where
there is sufficient governmental involvement in the rented
premises. Such an involvement exists in the case of housing

aided by Federal Housing Administration financing and tax

advantages. A tenant may not be summarily evicted from a
building operated by a "private" corporation where the
corporation enjoyed substantial tax exemption and had
obtained an FHA-insured mortgage, with governmental
subsidies to reduce interest payments. The "private"
corporation was so saturated with governmental incidents as to
be limited in its practices by constitutional process. Hence, it
could not terminate tenancies without notice and an opportunity
to be heard.

(b) Subject to the constitutional right of workers to

security of tenure and their right to be protected
against dismissal except for a just or authorized
cause and without prejudice to the requirement of
notice under Article 283 of this Code, the employer
shall furnish the worker whose employment is sought
to be terminated a written notice containing a
statement of the causes for termination and shall
afford the latter ample opportunity to be heard and to
defend himself with the assistance of his
representative if he so desires in accordance with
company rules and regulations promulgated
pursuant to the guidelines set by the Department of
Labor and Employment. Any decision taken by the
employer shall be without prejudice to the right of the
worker to contest the validity or legality of his
dismissal by filing a complaint with the regional
branch of the National Labor Relations Commission.
The burden of proving that the termination was for a
valid or authorized cause shall rest on the
employer. . . . .

But we need nor rely on foreign jurisprudence to repudiate the new

majority ruling that due process restricts government alone and not
private employers like ISETANN. This Court has always protected
employees whenever they are dismissed for an unjust cause by private
employers. We have consistently held that before dismissing an
employee for a just cause, he must be given notice and hearing by his
private employer. In Kingsize Manufacturing Corporation vs. NLRC,19 this
Court, thru Mr. Justice Mendoza, categorically ruled:
. . . (P)etitioners failure to give notice with warning to the
private respondents before their services were terminated puts
in grave doubt petitioners' claim that dismissal was for a just
cause. Section 2 Rule XIV of the Rules implementing the Labor
Code provides:

Previous to the amendment, Article 277 (b) read:

Art. 277. Miscellaneous provisions. (a) . . . .

An employer who seeks to dismiss a worker shall

furnish him a written notice stating the particular acts
or omission constituting the ground for dismissal. In
case of abandonment of work, the notice shall be
served on the worker's last known address.
The notice required, . . ., actually consists of two parts to be
separately served on the employee, to wit: (1) notice to apprise
the employee of the particular acts or omissions for which the
dismissal is sought; and (2) subsequent notice to inform him of
the employer's decision to dismiss him.
This requirement is not a mere technicality but a requirement of
due process to which every employee is entitled to insure that
the employer's prerogative to dismiss or lay off is not abused or
exercised in an arbitrary manner. This rule is clear and
unequivocal . . . .20
In other words, we have long adopted in our decisions the doctrine of
private due process. This is as it ought to be. The 1987 Constitution
guarantees the rights of workers, especially the right to security of tenure
in a separate article section 3 of Article XIII entitled Social Justice and
Human Rights. Thus, a 20-20 vision of the Constitution will show that the
more specific rights of labor are not in the Bill of Rights which is
historically directed against government acts alone. Needless to state,
the constitutional rights of labor should be safeguarded against assaults
from both government and private parties. The majority should not
reverse our settled rulings outlawing violations of due process by
employers in just causes cases.
To prop up its new ruling against our employees, the majority relates the
evolution of our law on dismissal starting from Article 302 of the Spanish
Code of Commerce, to the New Civil Code of 1950, to R.A. No. 1052
(Termination Pay Law), then to R.A. No. 1787. To complete the picture, let
me add that on May 1, 1974, the Labor Code (PD 442) was signed into
law by former President Marcos. It took effect on May 1, 1974 or six
months after its promulgation. The right of the employer to terminate the
employment was embodied in Articles 283,21 284,22 and 285.23 Batas
Pambansa Blg. 130 which was enacted on August 21, 1981 amended
Articles 283 and 284, which today are cited as Arts. 282 and 283 of the
Labor Code.24
On March 2, 1989, Republic Act No. 6715 was approved which amended,
among others, Article 277 of the Labor Code. Presently, Article 277 (b)
reads:
Art. 277. Miscellaneous provisions. (a) . . . .

(b) With or without a collective agreement, no

employer may shut down his establishment or
dismiss or terminate the employment of employees
with at least one year of service during the last two
years, whether such service is continuous or broken,
without prior written authority issued in accordance
with the rules and regulations as the Secretary may
promulgate.
Rule XIV, Book V of the 1997 Omnibus Rules Implementing the Labor
Code provides:
Termination of Employment
Sec. 1. Security of tenure and due process. No worker shall
be dismissed except for a just or authorized cause provided by
law and after due process.
Sec. 2. Notice of dismissal. Any employer who seeks to
dismiss a worker shall furnish him a written notice stating the
particular acts or omissions constituting the grounds for his
dismissal. . . .
xxx

xxx

xxx

Sec. 5. Answer and hearing. The worker may answer the

allegations stated against him in the notice of dismissal within a
reasonable period from receipt of such notice. The employer
shall afford the worker ample opportunity to be heard and to
defend himself with the assistance of his representative, if he
so desires.
These laws, rules and regulations should be related to our decisions
interpreting them. Let me therefore emphasize our rulings holding that the
pre-dismissal notice requirement is part of due process. In Batangas
Laguna Tayabas Bus Co. vs. Court of Appeals,25 which was decided
under the provisions of RA No. 1052 as amended by RA No. 1787, this
Court ruled that "the failure of the employer to give the [employee] the
benefit of a hearing before he was dismissed constitute an infringement
on his constitutional right to due process of law and not to be denied the
equal protection of the laws. . . . Since the right of [an employee] to his
labor is in itself a property and that the labor agreement between him and
[his employer] is the law between the parties, his summary and arbitrary
dismissal amounted to deprivation of his property without due process."
Since then, we have consistently held that before dismissing an
employee for a just cause, he must be given notice and hearing by his
private employer as a matter of due process.

I respectfully submit that these rulings are more in accord with the need
to protect the right of employees against illegal dismissals. Indeed, our
laws and our present Constitution are more protective of the rights and
interests of employees than their American counterpart. For one, to justify
private due process, we need not look for the factors of "sufficient
governmental involvement" as American courts do. Article 1700 of our
Civil Code explicitly provides:
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.
Nor do we have to strain on the distinction made by American courts
between property and privilege and follow their ruling that due process
will not apply if what is affected is a mere privilege. It is our hoary ruling
that labor is property within the contemplation of the due process clause
of the Constitution. Thus, in Philippine Movie Pictures Workers
Association vs. Premiere Productions, Inc.,26 private respondentemployer filed with the Court of Industrial Relations (CIR) a petition
seeking authority to lay off forty-four of its employees. On the date of the
hearing of the petition, at the request of the counsel of the private
respondent, the judge of the CIR conducted an ocular inspection in the
premises of the employer. He interrogated fifteen laborers. On the basis
of the ocular inspection, the judge concluded that the petition for lay off
was justified. We did not agree and we ruled that "the right of a person to
his labor is deemed to he property within the meaning of constitutional
guarantees. That is his means of livelihood. He can not be deprived of his
labor or work without due process of law. . . . (T)here are certain cardinal
primary rights which the Court of Industrial Relations must respect in the
trial of every labor case. One of them is the right to a hearing which
includes the right of the party interested to present his own case and to
submit evidence in support thereof."
I wish also to stress that the 1999 Rules and Regulations implementing
the Labor Code categorically characterize this pre-dismissal notice
requirement as a requirement of due process. Rule XXIII provides:
Sec. 2. Standards of due process: requirements of notice. In
all cases of termination of employment, the following standards
of due process shall be substantially observed.
I. For termination of employment based on just causes as
defined in Article 282 of the Code:
(a) A written notice served on the employee
specifying the ground or grounds for termination, and
giving to said employee reasonable opportunity
within which to explain his side;
(b) A hearing or conference during which the
employee concerned, with the assistance of counsel
if the employee so desires, is given opportunity to
respond to the charge, present his evidence or rebut
the evidence presented against him; and
(c) A written notice of termination served on the
employee indicating that upon due consideration of
all the circumstance, grounds have been established
to justify his termination.
In case of termination, the foregoing notices shall be served on
the employee's last known address.
II. For termination of employment as based on authorized
causes defined in Article 283 of the Code, the requirements of
due process shall be deemed complied with upon service of a
written notice to the employee and the appropriate Regional
Office of the Department at least thirty (30) days before the
effectivity of the termination, specifying the ground or grounds
for termination.

The new ruling of the majority is not in consonance with this Rule XXIII.
If we are really zealous of protecting the rights of labor as called for by
the Constitution, we should guard against every violation of their rights
regardless of whether the government or a private party is the culprit.
Section 3 of Article XIII of the Constitution requires the State to give full
protection to labor. We cannot be faithful to this duty if we give no
protection to labor when the violator of its rights happens to be private
parties like private employers. A private person does not have a better
right than the government to violate an employee's right to due process.
To be sure, violation of the particular right of employees to security of
tenure comes almost always from their private employers. To suggest that
we take mere geriatric steps when it comes to protecting the rights of
labor from infringement by private parties is farthest from the intent of the
Constitution. We trivialize the right of the employee if we adopt the rule
allowing the employer to dismiss an employee without any prior hearing
and say let him be heard later on. To a dismissed employee that remedy
is too little and too late. The new majority ruling is doubly to be regretted
because it comes at a time when deregulation and privatization are
buzzwords in the world being globalized. In such a setting, the new gods
will not be governments but non-governmental corporations. The greater
need of the day therefore is protection from illegal dismissals sans due
process by these non-governmental corporations.
The majority also holds that the "third reason why the notice requirement
under Art. 283 is not a requirement of due process 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." Again, with due respect, I beg to disagree. In an Article
283 situation, dismissal due to an authorized cause, the employer is not
called upon to act as an impartial judge. The employer is given the duty to
serve a written notice on the worker and the DOLE at least one month
before the intended date of lay-off. It is the DOLE, an impartial agency
that will judge whether or not the employee is being laid off for an
authorized caused.27 It is not the employer who will adjudge whether the
alleged authorized cause for dismissing the employee is fact or fiction.
On the other hand, in an Article 282 situation, dismissal for a just cause, it
is also incorrect to hold that an employer cannot be an impartial judge.
Today, the procedure on discipline and dismissal of employees is usually
defined in the parties' collective bargaining agreement or in its absence,
on the rules and regulations made by the employer himself. This
procedure is carefully designed to be bias free for it is to the interest of
both the employee and the employer that only a guilty employee is
disciplined or dismissed. Hence, where the charge against an employee
is serious, it is standard practice to include in the investigating committee
an employee representative to assure the integrity of the process. In
addition, it is usual practice to give the aggrieved employee an appellate
body to review an unfavorable decision. Stated otherwise, the
investigators are mandated to act impartially for to do otherwise can
bring havoc less to the employee but more to the employer. For one, if
the integrity of the grievance procedure becomes suspect, the employees
may shun it and instead resort to coercive measures like picketing and
strikes that can financially bleed employers. For another, a wrong,
especially a biased judgment can always be challenged in the DOLE and
the courts and can result in awards of huge damages against the
company. Indeed, the majority ruling that an employer cannot act as an
impartial judge has no empirical evidence to support itself. Statistics in
the DOLE will prove the many cases won by employees before the
grievance committees manned by impartial judges of the company.
Next, the majority holds that "the requirement to hear an employee before
he is dismissed should be considered simply as 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." It then rules that violation of this norm will render the
employer liable for damages but will not render his act of dismissal void.
Again, I cannot join the majority stance. The faultline of this ruling lies in
the refusal to recognize that employer-employee relationship is governed
by special labor laws and not by the Civil Code. The majority has
disregarded the precept that relations between capital and labor are
impressed with public interest. For this reason, we have the Labor Code
that specially regulates the relationship between employer-employee
including dismissals of employees. Thus, Article 279 of the Labor Code
specifically provides that "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 instatement 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 provision of the Labor Code clearly gives the
remedies that an unjustly dismissed employee deserves. It is not the Civil
Code that is the source of his remedies.
The majority also holds that lack of notice in an Article 283 situation
merely makes an employee dismissal "ineffectual" but not illegal. Again,
the ruling is sought to be justified by analogy and our attention is called to
Article 1592, in relation to Article 1191 of the Civil Code. It is contended
that "under these provisions, while the power to rescind is implied in
reciprocal obligations, nonetheless, in cases involving the sale of
immovable property, the vendor cannot rescind the contract 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." The analogy of the majority cannot be allowed both in law and
in logic. The legal relationship of an employer to his employee is not
similar to that of a vendor and a vendee. An employee suffers from a
distinct disadvantage in his relationship with an employer, hence, the
Constitution and our laws give him extra protection. In contrast, a vendor
and a vendee in a sale of immovable property are at economic par with
each other. To consider an employer-employee relationship as similar to a
sale of commodity is an archaic abomination. An employer-employee
relationship involves the common good and labor cannot be treated as a
mere commodity. As well-stated by former Governor General Leonard
Wood in his inaugural message before the 6th Philippine Legislature on
October 27, 1922, "it is opportune that we strive to impress upon all the
people that labor is neither a chattel nor a commodity, but human and
must be dealt with from the standpoint of human interests."
Next, the majority holds that under the Labor Code, only the absence of a
just cause for the termination of employment can make the dismissal of
an employee illegal. Quoting Article 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.
it is then rationalized that "to hold that the employer's failure to give notice
before dismissing an employee . . . results in the nullity of the dismissal
would, in effect, be to amend Article 279 by adding another ground, for
considering a dismissal illegal." With due respect, the majority has
misread Article 279. To start with, the article is entitled "Security of
Tenure" and therefore protects an employee against dismissal not only for
an unjust cause but also for an unauthorized cause. Thus, the phrase
"unjustly dismissed" refers to employees who are dismissed without just
cause and to employees who are laid off without any authorized cause.
As heretofore shown, we have interpreted dismissals without prior notice
as illegal for violating the right to due process of the employee. These
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 dismissing employees. Needless to state, it is
incorrect for the majority to urge that we are in effect amending Article
279.
In further explication of its ruling, the majority contends "what is more, it
would ignore the fact that under Art. 285, if it is the employee who fails to
give a written notice to the employer that he is leaving the service of the
latter, at least one month in advance, his failure to comply with the legal
requirement does not result in making his resignation void but only in
making him liable for damages." Article 285(a) states: "An employee may
terminate without just cause the employee-employer relationship by
serving a written notice on the employer at least one (1) month in
advance. The employer upon whom no such notice was served may hold
the employee liable for damages."

In effect, the majority view is that its new ruling puts at par both the
employer and the employee under Article 285, the failure of an
employee to pre-notify in writing his employer that he is terminating their
relationship does not make his walk-out void; under its new ruling, the
failure of an employer to pre-notify an employee before his dismissal
does not also render the dismissal void. By this new ruling, the majority in
a short stroke has rewritten the law on dismissal and tampered its proemployee philosophy. Undoubtedly, Article 285 favors the employee as it
does not consider void his act of terminating his employment relationship
before giving the required notice. But this favor given to an employee just
like the other favors in the Labor Code and the Constitution are precisely
designed to level the playing field between the employer and the
employee. It cannot be gainsaid that employees are the special subject of
solicitous laws because they have been and they continue to be exploited
by unscrupulous employers. Their exploitation has resulted in labor
warfare that has broken industrial peace and slowed down economic
progress. In the exercise of their wisdom, the founding fathers of our
1935, 1973 and 1987 Constitutions as well as the members our past and
present Congresses, have decided to give more legal protection and
better legal treatment to our employees in their relationship with their
employer. Expressive of this policy is President Magsaysay's call that "he
who has less in life should have more in law." 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 it to stoop down to reach the poor.
IV. NO UNJUST RESULTS OF CONSIDERING DISMISSALS
WITHOUT PRIOR NOTICE AS ILLEGAL
The majority further justifies its new ruling by holding:
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 having been given 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.
With due respect, I cannot understand this total turn around of the
majority on the issue of the unjustness of lack of pre-dismissal notice to
an employee. Heretofore, we have always considered this lack of notice
as unjust to the employee. Even under Article 302 of the Spanish Code of
Commerce of 1882 as related by the majority, an employer who opts to
dismiss an employee without any notice has to pay a mesada equivalent
to his salary for one month because of its unjustness. This policy was
modified by our legislators in favor of a more liberal treatment of labor as
our country came under the influence of the United States whose major
labor laws became the matrix of our own laws like R.A. 875, otherwise
known as the Industrial Peace Act. In accord with these laws, and as
aforediscussed, we laid down the case law that dismissals without prior
notice offend due process. This is the case law when the Labor Code was
enacted on May 1, 1974 and until now despite its amendments. The 1935
and the 1973 Constitutions did not change this case law. So with the
1987 Constitution which even strengthened the rights of employees,
especially their right to security of tenure. Mr. Justice Laurel in his usual
inimitable prose expressed this shift in social policy in favor of employees
as follows:
It should be observed at the outset that 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, and this they did, with the consciousness that the political
and philosophical aphorism of their generation will, in the
language of a great jurist, "be doubted by the next and perhaps
entirely discarded by the third." (Chief Justice Winslow in
Gorgnis v. Falk Co., 147 Wis., 327; 133 N. W., 209).
Embodying the spirit of the present epoch, general provisions
were inserted 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 Leibnitz many years ago to be secured through the
counter-balancing of economic and social forces and
employers or landlords, and employees or tenants,
respectively; and by prescribing penalties for the violation of
the orders" and later, Commonwealth Act No. 213, entitled "An
Act to define and regulate legitimate labor organizations."28
This ingrained social philosophy favoring employees has now been
weakened by the new ruling of the majority. For while this Court has
always considered lack of pre-dismissal notice as unjust to employees,
the new ruling of the majority now declares it is unjust to employers as if
employers are the ones exploited by employees. In truth, there is nothing
unjust to employers by requiring them to give notice to their employees
before denying them their jobs. There is nothing unjust to the duty to give
notice for the duty is a reasonable duty. If the duty is reasonable, then it is
also reasonable to demand its compliance before the right to dismiss on
the part of an employer can be exercised. If it is reasonable for an
employer to comply with the duty, then it can never be unjust if noncompliance therewith is penalized by denying said employer his right to
dismiss. In fine, if the employer's right to dismiss an employee is forfeited
for his failure to comply with this simple, reasonable duty to pre-notify his
employee, he has nothing to blame but himself. If the employer is
estopped from litigating the issue of whether or not he is dismissing his
employee for a just or an authorized cause, he brought the consequence
on to himself. The new ruling of the majority, however, inexplicably
considers this consequence as unjust to the employer and it merely winks
at his failure to give notice.
V. A LAST WORD
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 monied
employers and is a mockery of the right of employees to social justice.
There is no way to justify this pro-employer stance when the 1987
Constitution is undeniably more pro-employee than our previous
fundamental laws. Section 18 of Article II (State Policies) provides that
"the State affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare." Section 1, Article XIII
(Social Justice and Human Rights) calls for the reduction of economic
inequalities. Section 3, Article XIII (Labor) directs the State to accord full
protection to labor and to guaranty security of tenure. These are
constitutional polestars and not mere works of cosmetology. Our odes to
the poor will be meaningless mouthfuls if we cannot protect the
employee's right to due process against the power of the peso of
employers.
To an employee, a job is everything. Its loss involves terrible
repercussions stoppage of the schooling of children, ejectment from
leased premises, hunger to the family, a life without any safety net.
Indeed, to many employees, dismissal is their lethal injection. Mere
payment of money by way of separation pay and backwages will not
secure food on the mouths of employees who do not even have the right
to choose what they will chew.
I vote to grant the petition.

VITUG, J., separate (concurring and dissenting) opinion;

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 these are the just causes under
Article 2821 and the authorized causes under Article 283 2 and Article
284.3
An employee whose employment is terminated for a just cause is not
entitled to the payment of separation benefits. 4 Separation pay would be
due, however, when the lay-off is on account of an authorized cause. The
amount of separation pay would depend on the ground for the termination
of employment. A lay-off due to the installation of a labor saving device,
redundancy (Article 283) or disease (Article 284), entitles the worker to a
separation pay equivalent to "one (1) month pay or at least one (1) month
pay for every year of service, whichever is higher." When the termination
of employment is due to retrenchment to prevent losses, or to closure or
cessation of operations of an establishment or undertaking not due to
serious business losses or financial reverses, the separation pay is only
an equivalent of "one (1) month pay or at least one-half (1/2) month pay
for every year of service, whichever is higher." In the above instances, a
fraction of at least six (6) months is considered as one (1) whole year.
Due process of law, in its broad concept, is a principle in our legal system
that mandates due protection to the basic rights, inherent or accorded, of
every person against harm or transgression without an intrinsically just
and valid law, as well as an opportunity to be heard before an impartial
tribunal, that can warrant such an impairment. Due process guarantees
against arbitrariness and bears on both substance and procedure.
Substantive due process concerns itself with the law, its essence, and its
concomitant efficacy; procedural due process focuses on the rules that
are established in order to ensure meaningful adjudications appurtenant
thereto.
In this jurisdiction, the right to due process is constitutional and statutory.
Due process in the context of a termination of employment, particularly,
would be two-fold, i.e., substantive due process which is complied with
when the action of the employer is predicated on a just cause or an
authorized cause, and procedural due process which is satisfied when
the employee has the opportunity to contest the existence of the ground
invoked by the employer in terminating the contract of employment and to
be heard thereon. I find it difficult to ascribe either a want of wisdom or a
lack of legal basis to the early pronouncements of this Court that sanction
the termination of employment when a just or an authorized cause to
warrant the termination is clearly extant. Regrettably, the Court in some of
those pronouncements has used, less than guarded in my view, the term
"due process" when referring to the notices prescribed in the Labor
Code5 and its implementing rules6 that could, thereby, albeit unintendedly
and without meaning to, confuse the latter with the notice requirement in
adjudicatory proceedings. It is not seldom when the law puts up various
conditions in the juridical relations of parties; it would not be accurate to
consider, I believe, an infraction thereof to ipso-facto raise a problem of
due process. The mere failure of notice of the dismissal or lay-off does
not foreclose the right of an employee from disputing the validity, in
general, of the termination of his employment, or the veracity, in
particular, of the cause that has been invoked in order to justify that
termination. In assailing the dismissal or lay-off, an employee is entitled to
be heard and to be given the corresponding due notice of the
proceedings. It would be when this right is withheld without cogent
reasons that, indeed, it can rightly be claimed that the fundamental
demands of procedural due process have been unduly discarded.
I do appreciate the fact that the prescribed notices can have
consequential benefits to an employee who is dismissed or laid off, as the
case may be; its non-observance by an employer, therefore, can verily
entitle the employee to an award of damage but, to repeat, not to the
extent of rendering outrightly illegal that dismissal or lay-off predicated on
valid grounds. I would consider the indemnification to the employee not a
penalty or a fine against the employer, the levy of either of which would
require an appropriate legislative enactment; rather, I take the grant of

indemnity as justifiable as an award of nominal damages in accordance

with the provisions of Articles 2221-2223 of the Civil Code, viz:
Art. 2221. Nominal damages are 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.
Art. 2222. The court may award nominal damages in every
obligation arising from any source enumerated in article 1157,
or in every case where any property right has been invaded.
Art. 2223. The adjudication of nominal damages shall preclude
further contest upon the right involved and all accessory
questions, as between the parties to the suit, or their respective
heirs and assigns.
There is no fixed formula for determining the precise amount of nominal
damages. In fixing the amount of nominal damages to be awarded, the
circumstances of each case should thus be taken into account, such as,
to exemplify, the
(a) length of service or employment of the dismissed employee;
(b) his salary or compensation at the time termination of
employment vis-a-vis the capability of the employer to pay;
(c) question of whether the employer has deliberately violated
the requirements for termination of employment or has
attempted to comply, at least substantially, therewith; and/or
(d) reasons for the termination of employment.
I might stress the rule that the award of nominal damages is not for the
purpose of indemnification for a loss but for the recognition and
vindication of a right. The degree of recovery therefor can depend, on the
one hand, on the constitution of the right, and, upon the other hand, on
the extent and manner by which that right is ignored to the prejudice of
the holder of that right.
In fine7
A. A just cause or an authorized cause and a written notice of
dismissal or lay-off, as the case may be, are required
concurrently but not really equipollent in their consequence, in
terminating an employer-employee relationship.
B. Where there is neither just cause nor authorized cause, the
reinstatement of the employee and the payment of back
salaries would be proper and should be decreed. If the
dismissal or lay-off is attended by bad faith or if the employer
acted in wanton or oppressive manner, moral and exemplary
damages might also be a warded. In this respect, the Civil
Code provides:
Art. 2220. Willful injury to property may be a legal
ground for awarding moral damages if the court
should find that, under the circumstances, such
damages are just due. The same rule applies to
breaches of contract where the defendant acted
fraudulently or in bad faith.
Art. 2232. In contracts and quasi-contracts, the court
may award exemplary damages if the defendant
acted in a wanton, fraudulent, reckless, oppressive,
or malevolent manner (Civil Code).
Separation pay can substitute for reinstatement if such
reinstatement is not feasible, such as in case of a clearly

strained employer-employee relationship (limited to managerial

positions and contracts of employment predicated on trust and
confidence) or when the work or position formerly held by the
dismissed employee plainly has since ceased to be available.
C. Where there is just cause or an authorized cause for the
dismissal or lay-off but the required written notices therefor
have not been properly observed by an employer, it would
neither be light and justifiable nor likely intended by law to
order either the reinstatement of the dismissed or laid-off
employee or the payment of back salaries to him simply for the
lack of such notices if, and so long as, the employee is not
deprived of an opportunity to contest that dismissal or lay-off
and to accordingly be heard thereon. In the termination of
employment for an authorized cause (this cause being
attributable to the employer), the laid-off employee is statutorily
entitled to separation pay, unlike a dismissal for a just cause (a
cause attributable to an employee) where no separation pay is
due. In either case, if an employer fails to comply with the
requirements of notice in terminating the services of the
employee, the employer must be made to pay, as so
hereinabove expressed, corresponding damages to the
employee.
WHEREFORE, I vote to hold (a) that the lay-off in the case at bar is due
to redundancy and that, accordingly, the separation pay to petitioner
should be increased to one month, instead of one-half month, pay for
every year of service, and (b) that petitioner is entitled to his unpaid
wages, proportionate 13th-month pay, and an indemnity of P10,000.00 in
keeping with the nature and purpose of, as well as the rationale behind,
the grant of nominal damages.

PANGANIBAN, J., separate opinion;

In the case before us, the Court is unanimous in at least two findings: (1)
petitioner's 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 30-day 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 ten-year
doctrine on this question and has at least, in the process, increased the
monetary award that should go to the dismissed employee from 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 who
were dismissed for cause but without due process. 1 I formally registered
reservations on this rule in my ponencia in MGG Marine Services v.
NLRC2 and gave it full discussion in my Dissents in Better Buildings
v. NLRC3 and in Del Val v. NLRC.4
Without in any way diminishing my appreciation of this reexamination and
of the more financially-generous treatment the Court has accorded labor,
I write to take issue with the legal basis of my esteemed colleague, Mr.
Justice Mendoza, in arriving at his legal conclusion that "the employer's
failure to comply with the notice requirement does not constitute a denial

of due process but a mere failure to observe a procedure for the

termination of employment which makes the termination of employment
merely ineffectual." In short, he believes that (1) the 30-day notice
requirement finds basis only in the Labor Code, and (2) the sanction for
its violation is only "full back wages."
With due respect, I submit the following counter-arguments:
(1) The notice requirement finds basis not only in the Labor
Code but, more important, in the due process clause of the
Constitution.
(2) Consequently, when the 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. It is jurisprudentially settled, as I will
show presently, that when procedural due process is violated,
the proceedings in this case, the dismissal will be voided,
and the parties will have to be returned to their status quo ante;
that is, the employee will have to be given back his old job and
paid all benefits as if he were never dismissed.
(3) In any event, contrary to Mr. Justice Mendoza's premise,
even the Labor Code expressly grants the dismissed employee
not only the right to be notified but also the right to be heard.
In short, when an employee is dismissed without notice and hearing, the
effect is an illegal dismissal and the appropriate reliefs are reinstatement
and full back wages. In ruling that the dismissal should be upheld, the
Court majority has virtually rendered nugatory the employee's right to due
process as mandated by law and the Constitution. It implicitly allows the
employer to simply ignore such right and to just pay the employee. While
it increases the payment to "full back wages," it doctrinally denigrates his
right to due process to a mere statutory right to notice.
Let me explain the foregoing by starting with a short background of our
jurisprudence on the right to due process.
Without Due Process, the Proceedings Are Illegal
In the past, this Court has untiringly reiterated that there are two essential
requisites for an employer's valid termination of an employee's services:
(1) a just5 or authorized6 cause and (2) due process. 7 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 separation pay, and back
wages.8 If only the second requisite (due process) has not been fulfilled,
the employee, as earlier stated, is granted indemnity or damages
amounting to a measly P1,000 up to P10,000.9
I respectfully submit that illegal dismissal results not only from the
absence of a legal cause (enumerated in Arts. 282 to 284 of the Labor
Code), but likewise from the failure to observe due process. Indeed,
many are the cases, labor or otherwise, in which acts violative of due
process are unequivocally voided or declared illegal by the Supreme
Court. In Pepsi-Cola Bottling Co. v. NLRC,10 the Court categorically ruled
that the failure of management to comply with the requirements of due
process made its judgment of dismissal "void and non-existent."
This Court in People v. Bocar 11 emphatically made the following
pronouncement, which has been reiterated in several cases:12
The cardinal precept is that where there is a violation of basis
constitutional rights, courts are ousted of their jurisdiction. Thus
the violation of the State's right to due process raises a serious
jurisdictional issue (Gumabon vs. Director of the Bureau of
Prisons, L-30026, 37 SCRA 420 [Jan. 30, 1971]) which cannot
be glossed over or disregarded at will. Where the denial of the
fundamental right of due process is apparent, a decision
rendered in disregarded of the right is void for lack of

jurisdiction (Aducayen vs. Flores, L-30370, [May 25, 1973] 51

SCRA 78; Shell Co. vs. Enage, L-30111-12, 49 SCRA 416
[Feb. 27, 1973]). Any judgment or decision rendered
notwithstanding such violation may be regarded as a "lawless
thing, which can be treated as an outlaw and slain at sight, or
ignored wherever it exhibits its head" (Aducayen vs.
Flores, supra).
In the earlier case Bacus v. Ople,13 this Court also nullified the then labor
minister's clearance to terminate the employment of company workers
who had supposedly staged an illegal strike. The reason for this ruling
was the denial of sufficient opportunity for them to present their evidence
and prove their case. The Court explained:14
A mere finding of the illegality of a strike should not be
automatically followed by a wholesale dismissal of the strikers
from their employment. What is more, the finding of the
illegality of the strike by respondent Minister of Labor and
Employment is predicated on the evidence ascertained through
an irregular procedure conducted under the semblance of
summary methods and speedy disposition of labor disputes
involving striking employees.
While it is true that administrative agencies exercising quasijudicial functions are free from the rigidities of procedure, it is
equally well-settled in this jurisdiction that avoidance of such
technicalities of law or procedure in ascertaining objectively the
facts in each case should not, however, cause a denial of due
process. The relative freedom of the labor arbiter from the
rigidities of procedure cannot be invoked to evade what was
clearly emphasized in the landmark case of Ang Tibay v. Court
of Industrial Relations that all administrative bodies cannot
ignore or disregard the fundamental and essential
requirements of due process.
In the said case, the respondent company was ordered to reinstate the
dismissed workers, pending a hearing "giving them the opportunity to be
heard and present their evidence."
In Philippine National Bank v. Apalisok,15 Primitivo Virtudazo, an
employee of PNB, was served a Memorandum stating the finding against
him of a prima facie case for dishonesty and violation of bank rules and
regulations. He submitted his Answer denying the charges and explaining
his defenses.
Later, two personnel examiners of the bank conducted a fact-finding
investigation. They stressed to him that a formal investigation would
follow, in which he could confront and examine the witnesses for the
bank, as well as present his own. What followed, however, was a
Memorandum notifying him that he had been found guilty of the charges
and that he was being dismissed. After several futile attempts to secure a
copy of the Decision rendered against him, he instituted against PNB a
Complaint for illegal dismissal and prayed for reinstatement and
damages.
The trial court held that Virtudazo had been deprived of his rights to be
formally investigated and to cross-examine the witnesses. This Court
sustained the trial court, stating resolutely: "The proceedings having been
conducted without according to Virtudazo the "cardinal primary rights of
due process" guaranteed to every party in an administrative or quasijudicial proceeding, said proceedings must be pronounced null and
void."16
Also in Fabella v. Court of Appeals,17 this Court declared the dismissal of
the schoolteachers illegal, because the administrative body that heard the
charges against them had not afforded them their right to procedural due
process. The proceedings were declared void, and the orders for their
dismissal set aside. We unqualifiedly reinstated the schoolteachers, to
whom we awarded all monetary benefits that had accrued to them during
the period of their unjustified suspension or dismissal.

In People v. San Diego,18 People v. Sola,19 People v. Dactrdao,20 People

v. Calo Jr.21 and People v. Burgos,22this Court similarly voided the trial
court's grant of bail to the accused upon a finding that the prosecution
had been deprived of procedural due process.
In People v. Sevilleno,23 the Court noted that the trial judge "hardly
satisfied the requisite searching inquiry" due the accused when he
pleaded guilty to the capital offense he had been charged with. We thus
concluded that "the accused was not properly accorded his fundamental
right to be informed of the precise nature of the accusation leveled
against him." Because of the nonobservance of "the fundamental
requirements of fairness and due process," the appealed Decision was
annulled and set aside, and the case was remanded for the proper
arraignment and trial of the accused.
Recently, the Court vacated its earlier Decision 24 in People v.
Parazo25 upon realizing that the accused "a deaf-mute, a mental
retardate, whose mental age [was] only seven (7) years and nine (9)
months, and with low IQ of 60 only" had not been ably assisted by a
sign language expert during his arraignment and trial. Citing People
v. Crisologo,26 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 re-arraignment 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 letter-petition which
was passed upon by the Comelec without affording the candidate the
opportunity to explain her side and to counter the allegations in said
letter-petition. In invalidating the said Resolution, we again underscored
the necessity of the observance of the twin requirements of notice and
hearing before any decision can be validly rendered in a case.27

trouble during office hours. In an altercation with a co-employee, he

"slapped [the latter's] cap, stepped on his foot and picked up the ice
scooper and brandished it against [him]." When summoned by the
assistant manager, the employee "shouted and uttered profane words"
instead of giving an explanation. He was caught virtually in flagrante
delicto in the presence of many people. Under the circumstances action
was necessary to preserve order and discipline, as well as to safeguard
the customers' confidence in the employer's business a fastfood chain
catering to the general public where courtesy is a prized virtue.
However, in most of the succeeding cases, including the present one
before us in which the petitioner was dismissed on the very day he was
served notice, there were ample opportunities for the employers to
observe the requisites of due process. There were no exigencies that
called for immediate response. And yet, Wenphil was instantly invoked
and due process brushed aside.
I believe that the price that the Court has set for the infringement of the
fundamental right to due process is too insignificant, too niggardly, and
sometimes even too late. I believe that imposing a stiffer sanction is the
only way to emphasize to employers the extreme importance of the right
to due process in our democratic system. 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," is to allow
the rich and powerful to virtually purchase and to thereby stifle a
constitutional right granted to the poor and marginalized.
It may be asked: If the employee is guilty anyway, what difference would
it make if he is fired without due process? By the same token, it may be
asked: If in the end, after due hearing, a criminal offender is found guilty
anyway, what difference would it make if he is simply penalized
immediately without the trouble and the expense of trial? The absurdity of
this argument is too apparent to deserve further discourse.34
Worker's Right to Notice Is Constitutional, Not Merely Statutory

Clearly deducible from our extant jurisprudence is that the denial of a

person's fundamental right to due process amounts to the illegality of the
proceedings against him. Consequently, he is brought back to his 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,28 to which it is constitutionally mandated to
afford full protection.29 Yet, refusing to declare the illegality of dismissals
without due process, we have continued to impose upon the erring
employer the simplistic penalty of paying indemnity only. Hence, I submit
that it is time for us to denounce these dismissals as null and void and to
grant our workers these proper reliefs: (1) the declaration that the
termination or dismissal is illegal and unconstitutional and (2) the
reinstatement of the employee plus full back wages. The present ruling of
the Court is manifestly inconsistent with existing prudence which holds
that proceedings held without notice and hearing are null and void, since
they amount to a violation of due process, and therefore bring back the
parties to the status quo ante.
Exception: When Due Process Is Impractical and Futile
I am fully aware that in a long line of cases starting with Wenphil
v. NLRC,30 the Court has held: where there is just cause for the dismissal
of an employee but the employer fails to follow the requirements of
procedural due process, the former is not entitled to back wages,
reinstatement (or separation pay in case reinstatement is no longer
feasible) or other benefits. Instead, the employee is granted an indemnity
(or penalty or damages) ranging from P1,00031 to as much as
P10,000,32 depending on the circumstances of the case and the gravity of
the employer's omission. Since then, Wenphil has perfunctorily been
applied in most subsequent cases33 involving a violation of due process
(although just cause has been duly proven), without regard for the
peculiar factual milieu of each case. Indemnity or damages has become
an easy substitute for due process.
Be it remembered, however, that the facts in Wenphil clearly showed the
impracticality and the futility of observing the procedure laid down by law
and by the Constitution for terminating employment. The employee
involved therein appeared to have exhibited a violent temper and caused

According to the ponencia of Mr. Justice Mendoza, the "violation of the

notice requirement cannot be considered a denial of due process
resulting in the nullity of the employee's dismissal or lay-off." He argues
that the due process clause of the Constitution may be used against the
government 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 to continue protecting the people from new
forms of abuses.34-a
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]ne's employment, profession,
trade or calling is a property right within the protection of the
constitutional guaranty of due process of law."35
In a long line of cases involving judicial, quasi-judicial 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 dismissal to
be validly effected.36 The perceptive Justice Irene Cortes has aptly stated:
"One cannot go without the other, for otherwise the termination would, in
the eyes of the law, be illegal."37
Even the Labor Code Grants the Right to a Hearing

Besides, it is really inaccurate to say that the Labor Code grants "notice
alone" to employees being dismissed due to an authorized cause. Article
277 (b)38 of the said Code explicitly provides that the termination of
employment by the employer is "subject to the constitutional right of
workers to security of tenure[;] . . . without prejudice to the requirement of
notice under Article 283 of this Code, the employer shall furnish the
worker whose employment is sought to be terminated a written notice
containing a statement of the causes for termination and shall afford the
latter ample opportunity to be heard . . . ." Significantly, the provision
requires the employer "to afford [the employee] ample opportunity to be
heard" when the termination is due to a "just and authorized cause." I
submit that this provision on "ample opportunity to be heard" applies to
dismissals under Articles 282, 283 and 284 of the Labor Code.
In addition, to say that the termination is "simply ineffectual" for failure to
comply with the 30-day written notice and, at the same time, to conclude
that it has "legal effect" appears to be contradictory. Ineffectual means
"having no legal force." 39 If a dismissal has no legal force or effect, the
consequence should be the reinstatement of the dismissed employee
and the grant of full back wages thereto, as provided by law not the
latter only. Limiting the consequence merely to the payment of full back
wages has no legal or statutory basis. No provision in the Labor Code or
any other law authorizes such limitation of sanction, which Mr. Justice
Mendoza advocates.
The majority contends that it is not fair to reinstate the employee,
because the employer should not be forces to accommodate an
unwanted worker. I believe however that it is not the Court that forces the
employer to rehire the worker. By violating the latter's constitutional right
to due process, the former brings this sanction upon itself. Is it unfair to
imprison a criminal? No! By violating the law, one brings the penal
sanction upon oneself. There is nothing unfair or unusual about this
inevitable chain of cause and effect, of crime and punishment, of violation
and sanction.
Due Process Begins With Each of Us
To repeat, due process begins with the employer, not with the labor
tribunals. 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. Thus, in PNB v. Apalisok, which I cited earlier,
this Court voided the proceedings conducted by petitioner bank because
of its failure to observe Apalisok's right to due process.
Truly, justice is dispensed not just by the courts and quasi-judicial bodies
like public respondent here. The administration of justice begins with
each of us, in our everyday dealings with one another and, as in this
case, in the employers' affording their employees the right to be heard. If
we, as a people and as individuals, cannot or will not deign to act with
justice and render unto everyone his or her due in little, everyday things,
can we honestly hope and seriously expect to do so when monumental,
life-or-death issues are at stake? Unless each one is committed to a
faithful observance of day-to-day fundamental rights, our ideal of a just
society can never be approximated, not to say attained.

In the final analysis, what is involved here is not simply the amount of
monetary award, whether insignificant or substantial; whether termed
indemnity, penalty or "full back wages." Neither is it merely a matter of
respect for workers' rights or adequate protection of labor. The bottom
line is really the constitutionally granted right to due process. And due
process is the very essence of justice itself. Where the rule of law is the
bedrock of our free society, justice is its very lifeblood. Denial of due
process is thus no less than a denial of justice itself.
In Addition to Reinstatement and Back Wages, Damages May Be
Awarded
One last point. Justice Vitug argues in his Separate Opinion that the
nonobservance of the prescribed notices "can verily entitle the employee
to an award of damages but . . . not to the extent of rendering outrightly
illegal that dismissal or lay-off . . . ." I, of course, disagree with him insofar
as he denies the illegality of the dismissal, because as I already
explained, a termination without due process is unconstitutional and
illegal. But I do agree that, where the employee proves the presence of
facts showing liability for damages (moral, exemplary, etc.) as provided
under the Civil Code, the employee could be entitled to such award in
addition to reinstatement and back wages. For instance, where the illegal
dismissal has caused the employee "physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded feelings, moral
shock, social humiliation and similar injury" due to the bad faith of the
employer, an award for moral damages would be proper, in addition to
reinstatement and back wages.
Summary
To conclude, I believe that even if there may be a just or an authorized
cause for termination but due process is absent, the dismissal
proceedings must be declared null and void. The dismissal should still be
branded as illegal. Consequently, the employee must be reinstated and
given full back wages.
On the other hand, there is an exception. The employer can 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 is caught in flagrante delicto. Under any of these
circumstances, the dismissal will not be illegal and no award may
properly be granted. Nevertheless, as a measure of compassion, the
employee may be given a nominal sum depending on the circumstances,
pursuant to Article 2221 of the Civil Code.
Depending on the facts of each case, damages as provided under
applicable articles of the Civil Code may additionally be awarded.
WHEREFORE, I vote to GRANT the petition. Ruben Serrano should be
REINSTATED and PAID FULL BACK WAGES from date of termination
until actual reinstatement, plus all benefits he would have received as if
he were never dismissed.