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EN BANC

[G.R. No. 158693. November 17, 2004.]


JENNY M. AGABON and VIRGILIO C. AGABON, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION (NLRC), RIVIERA HOME IMPROVEMENTS, INC. and VICENTE ANGELES,
respondents.
Public Attorney's Office for petitioners.
Nestor P. Ricolcol for private respondents.
SYNOPSIS
Riviera Home Improvements, Inc. (Riviera) is engaged in the business of selling and
installing ornamental and construction materials. It employed petitioners as gypsum board
and cornice installers in 1992 until 1999 when they were dismissed for abandonment of
work. Whether petitioners were illegally dismissed, the Court ruled in the negative. DaIACS
Twice in the duration of their employment, petitioners accepted work for another company.
Hence, there was abandonment of work. It appears, however, that Riviera failed to send the
required notices to the petitioners to their last known address for the reason that it would be
useless since petitioners do not reside there anymore. This is a procedural infirmity which,
nonetheless, should not invalidate the dismissal, contrary to the prevailing but herein
abandoned case of Serrano v. NLRC. The employer was liable but only for non-compliance
with the procedural requirements of due process.
SYLLABUS
1.
REMEDIAL LAW; EVIDENCE; FACTUAL FINDINGS OF QUASI-JUDICIAL AGENCIES,
GENERALLY RESPECTED; EXCEPTIONS; WHEN THE NLRC AND THE LABOR ARBITER ARE IN
CONFLICT. It is well-settled that findings of fact of quasi-judicial agencies like the NLRC are
accorded not only respect but even finality if the findings are supported by substantial
evidence. This is especially so when such findings were affirmed by the Court of Appeals.
However, if the factual findings of the NLRC and the Labor Arbiter are conflicting, as in this
case, the reviewing court may delve into the records and examine for itself the questioned
findings. DEacIT
2.
LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; DISMISSAL;
GROUNDS. To dismiss an employee, the law requires not only the existence of a just and
valid cause but also enjoins the employer to give the employee the opportunity to be heard
and to defend himself. Article 282 of the Labor Code enumerates the just causes for
termination by the employer: (a) serious misconduct or willful disobedience by the employee
of the lawful orders of his employer or the 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.
3.
ID.; ID.; NEGLECT OF DUTY; ABANDONMENT; REQUISITES; PRESENT IN CASE AT BAR.
Abandonment is the deliberate and unjustified refusal of an employee to resume his
employment. It is a form of neglect of duty, hence, a just cause for termination of
employment by the employer. For a valid finding of abandonment, these two factors should
be present: (1) the failure to report for work or absence without valid or justifiable reason;
and (2) a clear intention to sever employer-employee relationship, with the second as the
more determinative factor which is manifested by overt acts from which it may be deduced

that the employees has no more intention to work. The intent to discontinue the
employment must be shown by clear proof that it was deliberate and unjustified. The record
of an employee is a relevant consideration in determining the penalty that should be meted
out to him. In Sandoval Shipyard v. Clave, we held that an employee who deliberately
absented from work without leave or permission from his employer, for the purpose of
looking for a job elsewhere, is considered to have abandoned his job. We should apply that
rule with more reason here where petitioners were absent because they were already
working in another company. The law imposes many obligations on the employer such as
providing just compensation to workers, observance of the procedural requirements of
notice and hearing in the termination of employment. On the other hand, the law also
recognizes the right of the employer to expect from its workers not only good performance,
adequate work and diligence, but also good conduct and loyalty. The employer may not be
compelled to continue to employ such persons whose continuance in the service will
patently be inimical to his interests. cdasiajur
4.
ID.; ID.; PROCEDURE. The procedure for terminating an employee is found in Book
VI, Rule I, Section 2 (d) of the Omnibus Rules Implementing the Labor Code: Standards of
due process: requirements of notice. In all cases of termination of employment, the
following standards of due process shall be substantially observed: I. For termination of
employment based on just causes as defined in Article 282 of the Code: (a) A written notice
served on the employee specifying the ground or grounds for termination, and giving to said
employee reasonable opportunity within which to explain his side; (b) A hearing or
conference during which the employee concerned, with the assistance of counsel if the
employee so desires, is given opportunity to respond to the charge, present his evidence or
rebut the evidence presented against him; and (c) A written notice of termination served on
the employee indicating that upon due consideration of all the circumstances, grounds have
been established to justify his termination. In case of termination, the foregoing notices shall
be served on the employee's last known address. Dismissals based on just causes
contemplate acts or omissions attributable to the employee while dismissals based on
authorized causes involve grounds under the Labor Code which allow the employer to
terminate employees. A termination for an authorized cause requires payment of separation
pay. When the termination of employment is declared illegal, reinstatement and full
backwages are mandated under Article 279. If reinstatement is no longer possible where the
dismissal was unjust, separation pay may be granted.
5.
ID.; ID.; ID.; NOTICES REQUIRED; ELUCIDATED. Procedurally, (1) if the dismissal is
based on a just cause under Article 282, the employer must give the employee two written
notices and a hearing or opportunity to be heard if requested by the employee before
terminating the employment: a notice specifying the grounds for which dismissal is sought a
hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice
of the decision to dismiss; and (2) if the dismissal is based on authorized causes under
Articles 283 and 284, the employer must give the employee and the Department of Labor
and Employment written notices 30 days prior to the effectivity of his separation. From the
foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause
under Article 282 of the Labor Code, for an authorized cause under Article 283, or for health
reasons under Article 284, and due process was observed; (2) the dismissal is without just or
authorized cause but due process was observed; (3) the dismissal is without just or
authorized cause and there was no due process; and (4) the dismissal is for just or
authorized cause but due process was not observed. In the first situation, the dismissal is
undoubtedly valid and the employer will not suffer any liability. In the second and third
situations where the dismissals are illegal, Article 279 mandates that the employee is
entitled to reinstatement without loss of seniority rights and other privileges and full
backwages, inclusive of allowances, and other benefits or their monetary equivalent
computed from the time the compensation was not paid up to the time of actual
reinstatement. In the fourth situation, the dismissal should be upheld. While the procedural

infirmity cannot be cured, it should not invalidate the dismissal. However, the employer
should be held liable for non-compliance with the procedural requirements of due process.
CSTDEH
6.
ID.; ID.; ID.; ID.; CASE OF SERRANO v. NLRC; THAT DISMISSAL EVEN IF VALID IS
INEFFECTUAL IF MADE WITHOUT NOTICE, AND EMPLOYER MUST PAY FULL BACKWAGES FROM
TERMINATION UNTIL DISMISSAL JUDICIALLY DECLARED FOR JUST CAUSE; RULING, REEXAMINED. A review and re-examination of the relevant legal principles is appropriate and
timely to clarify the various rulings on employment termination in the light of Serrano v.
National Labor Relations Commission. We held that the violation by the employer of the
notice requirement in termination for just or authorized causes was not a denial of due
process that will nullify the termination. However, the dismissal is ineffectual and the
employer must pay full backwages from the time of termination until it is judicially declared
that the dismissal was for a just or authorized cause. We believe, however, that the ruling in
Serrano did not consider the full meaning of Article 279 of the Labor Code which states: ART.
279. Security of Tenure. In cases of regular employment, the employer shall not terminate
the services of an employee except for a just cause or when authorized by this Title. An
employee who is unjustly dismissed from work shall be entitled to reinstatement without loss
of seniority rights and other privileges and to his full backwages, inclusive of allowances,
and to his other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual reinstatement. This means
that the termination is illegal only if it is not for any of the justified or authorized causes
provided by law. Payment of backwages and other benefits, including reinstatement, is
justified only if the employee was unjustly dismissed. After carefully analyzing the
consequences of the divergent doctrines in the law on employment termination, we believe
that in cases involving dismissals for cause but without observance of the twin requirements
of notice and hearing, the better rule is to abandon the Serrano doctrine and to follow
Wenphil case by holding that the dismissal was for just cause but imposing sanctions on the
employer. Such sanctions, however, must be stiffer than that imposed in Wenphil to
discourage the abhorrent practice of "dismiss now, pay later," which we sought to deter. The
sanction should be in the nature of indemnification or penalty and should depend on the
facts of each case, taking into special consideration the gravity of the due process violation
of the employer. By doing so, this Court would be able to achieve a fair result by dispensing
justice not just to employees, but to employers as well.
7.
POLITICAL LAW; CONSTITUTIONAL LAW; BILL OF RIGHTS; RIGHT TO DUE PROCESS;
CONSTRUED. The Due Process Clause in Article III, Section 1 of the Constitution embodies
a system of rights based on moral principles so deeply imbedded in the traditions and
feelings of our people as to be deemed fundamental to a civilized society as conceived by
our entire history. Due process is that which comports with the deepest notions of what is
fair and right and just. It is a constitutional restraint on the legislative as well as on the
executive and judicial powers of the government provided by the Bill of Rights.
8.
LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; DISMISSAL; DUE
PROCESS; ELUCIDATED. Due process under the Labor Code, like Constitutional due
process, has two aspects: substantive, i.e., the valid and authorized causes of employment
termination under the Labor Code; and procedural, i.e., the manner of dismissal. Procedural
due process requirements for dismissal are found in the Implementing Rules of P.D. 442, as
amended, otherwise known as the Labor Code of the Philippines in Book VI, Rule I, Sec. 2, as
amended by Department Order Nos. 9 and 10. Breaches of these due process requirements
violate the Labor Code. Therefore statutory due process should be differentiated from failure
to comply with constitutional due process. Constitutional due process protects the individual
from the government and assures him of his rights in criminal, civil or administrative
proceedings; while statutory due process found in the Labor Code and Implementing Rules
protects employees from being unjustly terminated without just cause after notice and
hearing. CIAcSa

9.
CONSTITUTIONAL LAW; STATE POLICIES; PROTECTION TO LABOR; NOT MEANT TO
OPPRESS EMPLOYERS. The constitutional policy to provide full protection to labor is not
meant to be a sword to oppress employers. The commitment of this Court to the cause of
labor does not prevent us from sustaining the employer when it is in the right, as in this
case. Certainly, an employer should not be compelled to pay employees for work not
actually performed and in fact abandoned. The employer should not be compelled to
continue employing a person who is admittedly guilty of misfeasance or malfeasance and
whose continued employment is patently inimical to the employer. The law protecting the
rights of the laborer authorizes neither oppression nor self-destruction of the employer. An
employee who is clearly guilty of conduct violative of Article 282 should not be protected by
the Social Justice Clause of the Constitution. Social justice, as the term suggests, should be
used only to correct an injustice. As the eminent Justice Jose P. Laurel observed, social justice
must be founded on the recognition of the necessity of interdependence among diverse
units of a society and of the protection that should be equally and evenly extended to all
groups as a combined force in our social and economic life, consistent with the fundamental
and paramount objective of the state of promoting the health, comfort, and quiet of all
persons, and of bringing about "the greatest good to the greatest number." Justice in every
case should only be for the deserving party. It should not be presumed that every case of
illegal dismissal would automatically be decided in favor of labor, as management has rights
that should be fully respected and enforced by this Court. As interdependent and
indispensable partners in nation-building, labor and management need each other to foster
productivity and economic growth; hence, the need to weigh and balance the rights and
welfare of both the employee and employer.
10.
LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; DISMISSAL; DUE
PROCESS; VIOLATION THEREOF; PROPER PENALTY. Under the Civil Code, nominal damages
is adjudicated in order that a right of the plaintiff, which has been violated or invaded by the
defendant, may be vindicated or recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him. The violation of the petitioners' right to statutory due
process by the private respondent warrants the payment of indemnity in the form of nominal
damages. The amount of such damages is addressed to the sound discretion of the court,
taking into account the relevant circumstances. Considering the prevailing circumstances in
the case at bar, we deem it proper to fix it at P30,000.00. We believe this form of damages
would serve to deter employers from future violations of the statutory due process rights of
employees. At the very least, it provides a vindication or recognition of this fundamental
right granted to the latter under the Labor Code and its Implementing Rules. IDcHCS
11.
REMEDIAL LAW; EVIDENCE; BURDEN OF PROOF; RESTS ON THE ONE WHO PLEADS
PAYMENT. As a general rule, one who pleads payment has the burden of proving it. Even
where the employee must allege non-payment, the general rule is that the burden rests on
the employer to prove payment, rather than on the employee to prove non-payment. The
reason for the rule is that the pertinent personnel files, payrolls, records, remittances and
other similar documents which will show that overtime, differentials, service incentive
leave and other claims of workers have been paid are not in the possession of the worker
but in the custody and absolute control of the employer.
12.
LABOR AND SOCIAL LEGISLATION; EMPLOYMENT; WAGES; INCLUDES 13TH MONTH
PAY; UNAUTHORIZED DEDUCTION THEREFROM, PROHIBITED. Anent the deduction of SSS
loan and the value of the shoes from petitioner Virgilio Agabon's 13th month pay, we find
the same to be unauthorized. The evident intention of Presidential Decree No. 851 is to
grant an additional income in the form of the 13th month pay to employees not already
receiving the same so as "to further protect the level of real wages from the ravages of
world-wide inflation." Clearly, as additional income, the 13th month pay is included in the
definition of wage under Article 97 (f) of the Labor Code, to wit: (f) "Wage" paid to any
employee shall mean the remuneration or earnings, however designated, capable of being
expressed in terms of money whether fixed or ascertained on a time, task, piece, or

commission basis, or other method of calculating the same, which is payable by an


employer to an employee under a written or unwritten contract of employment for work
done or to be done, or for services rendered or to be rendered and includes the fair and
reasonable value, as determined by the Secretary of Labor, of board, lodging, or other
facilities customarily furnished by the employer to the employee. . . ." from which an
employer is prohibited under Article 113 of the same Code from making any deductions
without the employee's knowledge and consent. In the instant case, private respondent
failed to show that the deduction of the SSS loan and the value of the shoes from petitioner
Virgilio Agabon's 13th month pay was authorized by the latter. The lack of authority to
deduct is further bolstered by the fact that petitioner Virgilio Agabon included the same as
one of his money claims against private respondent. IDAEHT
PUNO, J., dissenting opinion:
1.
CONSTITUTIONAL LAW; PROTECTION AFFORDED TO LABOR. The 1987 Constitution
has deepened the roots of social justice and expanded its branches to include "all phases of
national development." An entire article was devoted to Social Justice and Human Rights
which properly includes a full section on labor. Then, Article II (Declaration of Principles and
State Policies), Section 18 of the 1987 Constitution, provides that "[t]he State affirms labor
as a primary social economic force. It shall protect the rights of workers and promote their
welfare." Under Article II (Declaration of Principles and State Policies), Section 9 of the 1987
Constitution, "[t]he State shall promote a just and dynamic social order that will ensure the
prosperity and independence of the nation and free the people from poverty through policies
that provide adequate social services, promote full employment, a rising standard of living
and an improved quality of life for all." These provisions protecting labor are not mere beliefs
but should be reinforced by everyone's behavior.
2.
LABOR AND SOCIAL LEGISLATION; LABOR CODE; PROTECTION AFFORDED FOR THE
WORKINGMAN'S WELFARE. In 1974, P.D. 442, as amended, otherwise known as the Labor
Code of the Philippines, was enacted. There was power in its purpose which was trumpeted
in its title to afford protection to labor, promote employment and human resources
development and insure industrial peace based on social justice. In May 1980 and then
again in March 1989, B.P. Blg. 70 and R.A. No. 6715 were approved, respectively, "to
strengthen the constitutional right of workers" and "to extend protection to labor."
Accordingly, Volkschel Labor Union v. Bureau of Labor Relations, decreed that "[i]n the
implementation and interpretation of the provisions of the Labor Code and its implementing
regulations, the workingman's welfare should be the primordial and paramount
consideration." aTCAcI
3.
CONSTITUTIONAL LAW; PROTECTION AFFORDED TO LABOR; DUTY OF COURT TO GIVE
SUBSTANCE TO THE CONSTITUTIONAL POSTULATE IN FAVOR OF THE WORKINGMAN.
Courts at all times should give meaning and substance to constitutional postulates in favor
of the workingman. The 1987 Constitution is fraught with provisions protecting the
workingman, e.g., Secs. 9, 10 and 18, Art. II, and Sec. 3, Art XIII, a legacy of the evolution of
rights. These constitutional creeds should not be dwarfed by deeds. A contrary posture
would convert these creeds as "meaningless constitutional patter." The principle of social
justice was not embedded in the fundamental law for demagoguery. It was meant to be a
vital, articulate, compelling principle of public policy. Social justice should be a living reality
and not a mere high level abstraction. Thus, while the Constitution must be read as a whole,
even if we do not invoke its Due Process Clause, the coherent application of the separate
constitutional creeds on social justice and labor is enough to uphold the workers'
constitutional right to work and their consequent right to job security. These substantive
rights are not to be weakened by a diminished procedural right. For in weakening the
procedure, we weaken the substantive right. The importance of the procedure to protect the
exercise of the right to work cannot be overemphasized.

4.
ID.; ID.; AS BETWEEN EMPLOYER AND EMPLOYEE, STRICTER COMPLIANCE DEMANDED
FROM EMPLOYER. The constitution puts the employee on equal footing with his employer.
As between an employee, usually poor and unlettered, and the employer, who has resources
to secure able legal advice, the law has reason to demand from the latter stricter
compliance. For, social justice in these cases is not equality but protection. Mr. Chief Justice
Ramon C. Aquino, in his Concurring Opinion in Allied Investigation Bureau v. Hon. Inciong,
opined that "social justice in the case of the laborers means compassionate justice or an
implementation of the policy that those who have less in life should have more in law." The
Constitution helps labor for a simple reason. Employees are overmatched in their struggle
against their employers. Their playing field is not level. STcHDC
5.
ID.; ID.; RIGHT TO DUE PROCESS IN LABOR CASES, EMPHASIZED. This Court has
long extended constitutional due process in labor cases involving private action. Prior to
Wenphil, the rule etched in stone is that an employer can validly dismiss an erring employee
only after giving him notice and hearing. Thus, decades ago, this Court in Batangas Laguna
Tayabas Bus Co. v. Court of Appeals ruled that "the failure of petitioner to give the private
respondent the benefit of a hearing before he was dismissed constitutes an infringement on
his constitutional right to due process of law." In De Leon v. National Labor Relations
Commission where an employee was dismissed without notice, it was held that "[t]here is in
this case a clear denial of due process, a constitutional right which must be safeguarded at
all times especially when what is at stake is petitioner's position as his only means of
livelihood." In Reyes v. Philippine Duplicators, Inc., where petitioner Reyes was dismissed
from the service in 1977 without any investigation or hearing, this Court found that the
dismissal was arbitrary as Reyes was denied due process. Hence, even the non-compliance
with Sections 2 and 3, Rule XIV, Book V of the Implementing Rules and Regulations of the
Labor Code pursuant to the amendments of P.D. No. 850 which was issued in 1975, requiring
a prior clearance from the Department of Labor to terminate the services of an employee,
rendered the termination illegal and nullified the dismissal of the employee. In August 1981,
B.P. Blg. 130 did away with the clearance to terminate employment. Prior notice and formal
investigation were however instead imposed as conditions sine qua non before termination
may be effected. Thus, the inviolability of prior notice and hearing before an employee could
be dismissed was iterated and reiterated. In Miguel v. National Labor Relations Commission,
where the employee was simply handed his walking papers without any explanation, this
Court held that the dismissal was unwarranted and ruled that "[t]he due process
requirement is not a mere formality that may be dispensed with at will. Its disregard is a
matter of serious concern since it constitutes a safeguard of the highest order in response to
man's innate sense of justice." Kwikway Engineering Works v. National Labor Relations
Commission, explained that "[t]he twin requirements of notice and hearing constitute
essential elements of due process in cases of employee dismissal: the requirement of notice
is intended to inform the employee concerned of the employer's intent to dismiss and the
reason for the proposed dismissal; upon the other hand, the requirement of hearing affords
the employee an opportunity to answer his employer's charges against him accordingly to
defend himself therefrom before dismissal is effected. Neither of these two requirements can
be dispensed with without running afoul of the due process requirement of the 1987
Constitution." In a stream of ceaseless cases, we adhered to the doctrine that failure to
comply with the two-notice rule makes the dismissal illegal and reinstatement or payment of
separation pay in order. In fine, "fire the employee, and let him explain later" violates this
hallowed rule. It has always been this way until Wenphil. DSAEIT
6.
ADMINISTRATIVE LAW; ADMINISTRATIVE DUE PROCESS; APPLICATION IN HEARINGS
BEFORE EMPLOYERS PRIOR TO DISMISSAL OF EMPLOYEE. Hearings before the employers
prior to the dismissal are in the nature of and akin to administrative due process which is
free from the rigidity of certain procedural requirements. Mr. Justice Laurel way back in 1940
enumerated the cardinal rights of parties in administrative proceedings in the landmark case
of Ang Tibay v. Court of Industrial Relations. 1. the right to a hearing which includes the

right to present one's case and submit evidence in support thereof; 2. the tribunal must
consider the evidence presented; 3. the decision must have something to support itself; 4.
the evidence must be substantial which means such evidence as a reasonable mind might
accept as adequate to support a conclusion; 5. the decision must be based on the evidence
presented at the hearing, or at least contained in the record and disclosed to the parties
affected; 6. the tribunal or body or any of its judges must act on its own independent
consideration of the law and facts of the controversy, and not simply accept the views of a
subordinate; 7. the board or body should, in all controversial questions, render its decision in
such manner that the parties to the proceeding can know the issues involved and the
reasons for the decision rendered. CAcEaS
7.
LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; ILLEGAL
DISMISSAL; EMPLOYEE DENIED PROCEDURAL DUE PROCESS ENTITLED TO REINSTATEMENT.
An employee who is denied procedural due process is entitled to reinstatement. Nothing
less. This Court, in carrying out the constitutional directive of the 1973 Constitution requiring
the State to "assure the rights of workers to . . . security of tenure . . ." has quite consistently
nullified, simply on constitutional grounds, dismissals in violation of procedural due process,
notwithstanding the absence of an express provision of any statute. The Court has done the
same under the 1987 Constitution which admittedly has given more protection to labor than
any of our previous charters through a four-paragraph section in the Article on Social
Justice and Human Rights which details the protective mantle accorded to labor alone. Thus,
Art. XIII, Sec. 3 of the 1987 Constitution decrees that "[t]he State shall afford full protection
to labor . . . and promote full employment . . . (All workers) shall be entitled to security of
tenure . . ." Art. XII, Sec. 18 of the 1987 Constitution mandates that "[t]he State affirms labor
as a primary social economic force. It shall protect the rights of workers and promote their
welfare." All told, this Court for almost three decades has set aside, on constitutional
grounds, dismissals in violation of procedural due process until Wenphil came along, with
the interests of the employer tailing and suddenly enjoying preference. To uphold Wenphil,
Serrano, and now Agabon, is to dilute the protection to those who need it most despite the
constitutional mandate which in the language of Mr. Justice Cardozo speaks with "a
reverberating clang that drowns all weaker sounds." With due respect, the grant of
indemnity to the dismissed employee "as both penalty and disincentive" as the majority
provides in the instant case does not square with the protection accorded by the
Constitution to labor. There is only one main relief in cases of dismissal without notice and
hearing reinstatement.
8.
ID.; ID.; ID.; COMPLIANCE WITH PROCEDURAL DUE PROCESS NOT A BURDEN ON
EMPLOYERS. Compliance with procedural due process is not a burden on employers. There
is no valid reason why employers should have any difficulty according procedural due
process to their employees. The rules are fairly simple. In cases of dismissal based on just
causes (Article 282, Labor Code), the employer must give two (2) simple notices: (1) notice
before dismissal to apprise the employee being dismissed of the particular acts or omissions
for which the dismissal is sought, and (2) subsequent notice to inform him of the employer's
decision to dismiss him. In cases of dismissal for authorized causes (Article 283, Labor
Code), the employer must serve an uncomplicated written notice on the worker and on the
Department of Labor and Employment at least one (1) month before the intended closure of
the establishment or reduction of personnel. The law requires nothing more. IHcTDA
9.
ID.; ID.; ID.; RIGHT OF EMPLOYER TO DISMISS AN EMPLOYEE DIFFERS FROM THE
MANNER IN WHICH SUCH RIGHT IS EXERCISED WHICH MUST BE WITHOUT ABUSE OF
DISCRETION. The right of an employer to dismiss an employee differs from and should not
be confused with the manner in which such right is exercised. While the management has
certain privileges, the exercise of such privileges must be made without abuse of discretion.
Thus, Dole Philippines v. National Labor Relations Commission, recognized as a management
prerogative the determination of the need for the phasing out of a department as a labor
and cost saving device. In the same manner, Remereco Garments Manufacturing v. Minister

of Labor and Employment conceded that it is the sole prerogative of management to dismiss
or lay-off an employee. But in these two cases, and in so many other cases, this Court
cautioned that the exercise of such prerogatives must be made without abuse of discretion
for what is at stake is not only the employee's position but also their means of livelihood. It
must not be oppressive and abusive since it affects one's person and property. It is the right
of every workingman to assure himself and his family a life worthy of human dignity.
Consequently, in dismissing an employee based on authorized cause or for just cause, as the
case may be, the employer must, at the very minimum, comply with procedural due process.
Failure to observe due process, particularly the prior notice requirement, rightly deserves
stiff sanctions, if not condemnation.
10.
ID.; ID.; RIGHT OF EMPLOYEE TO SECURITY OF TENURE; OF PARAMOUNT VALUE
RECOGNIZED BY THE CONSTITUTION. In the hierarchy of rights of an employee, the right
to security of tenure is high, if not the highest. Its paramount value is recognized and
guaranteed under our new Constitution. Consequently, the first paragraph of Article XIII,
Section 3 of the 1987 Constitution, extends the protective mantle of the Constitution to all of
labor including the promotion of full employment. The second paragraph specifies the
guaranteed right to security of tenure. All other rights, e.g., the right to collective bargaining
and negotiations, the right to peaceful concerted activities, the right to strike and form
unions, and the right to due process, merely complement the right to job security. All these
complementary rights are meaningless to an unemployed Juan De la Cruz. Thus, we held in
Rance v. National Labor Relations Commission, "[i]t is the policy of the State to assure the
right of workers to 'security of tenure.' The guarantee is an act of social justice. When a
person has no property, his job may possibly be his only possession or means of livelihood.
Therefore he should be protected against any arbitrary deprivation of his job." ADHCSE
11.
ID.; ID.; IMPORTANCE OF WORK, EMPHASIZED. Workers need work more than
anything else. For a wageworker, a job is important. While there is work, there is food on the
table. Take away work, replace it with a meager lump sum, and the food will disappear.
Through work, the breadwinner satisfies his basic needs and those of his family. He also
provides himself with a means to express himself, transform, develop and perfect his skills
and talents. Through work, he interacts and establishes relations with others. Work is a
defining feature of human existence. It is the means of sustaining life and meeting essential
needs. It is also an activity through which individuals affirm their own identity, both to
themselves and to those around them. It is crucial to individual choice, to the welfare of
families and to the stability of societies. Every man has the right to work, to a chance to
develop his qualities and his personality in the exercise of his profession, to equitable
remuneration which will enable him and his family to lead a worthy life on material, social,
cultural and spiritual level. Shylock said it well: "You take my life when you do take the
means whereby I live."
12.
ID.; ID.; ILLEGAL DISMISSAL; EMPLOYEE'S RIGHT TO DUE PROCESS; PAYMENT OF
NOMINAL DAMAGES IN VIOLATION THEREOF IS TO GIVE UNDUE ADVANTAGE TO EMPLOYERS.
To simply allow payment of nominal damages for violation of employee's right to due
process is to give undue advantage to employers. One does not need to have a
stratospheric mind to know that the Constitution gave greater rights to employees over their
employers. The intent is to equalize the fight of the underprivileged against the
overprivileged. We cannot allow the employers to marginalize the right of the workingman to
due process for a few pesos without mocking the protection accorded by the Constitution to
the powerless. The deprivation of the right to security of tenure and due process is beyond
monetary valuation. TSHcIa
PANGANIBAN, J., dissenting opinion:
1.
LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; DISMISSAL; DUE
PROCESS; EFFECT OF VIOLATION THEREOF. The notice requirement finds basis not only in

the Labor Code but, more important, in the due process clause of the Constitution.
Consequently, when an employee is dismissed without due process, the legal effect is an
illegal dismissal; and the appropriate sanction is full back wages plus reinstatement, not
merely full back wages (or separation pay), much less merely "indemnity of one month
salary for every year of service." It is jurisprudentially settled that when procedural due
process is violated, the proceedings in this case, the dismissal shall be voided, and the
parties returned to their status quo ante; that is, the employees should be given back their
old jobs and paid all benefits as if they have never been dismissed. In ruling that the
dismissal should be deemed legal, the majority has virtually rendered nugatory the
employees' right to due process as mandated by law and the Constitution. It has implicitly
allowed the employer simply to ignore such right and just pay the employee. I respectfully
submit that illegal dismissal results not only from the absence of a legal cause, in
accordance with Articles 282 to 284 of the Labor Code, but likewise from the failure to
observe due process. There are many labor and other cases in which acts violative of due
process unequivocally been declared illegal by the Court. They range from similar cases of
employment termination to criminal prosecutions to administrative cases and election cases
as well.
2.
ID.; ID.; ID.; ID.; EXCEPTION. The only exception to the [due process] sanctions
would be a case analogous to Wenphil, one clearly showing the impracticality and the futility
of observing the procedure laid down by law in terminating employment; if the employer
could adequately prove that under the peculiar circumstances of the case, there was no
opportunity to comply with due process requirements; or doing so would have been
impractical or gravely adverse to the employer, as when the employee was caught in
flagrante delicto. Under such circumstances, dismissal would not be illegal, and no award
may properly be granted. Nevertheless, as a measure of compassion in this specific
instance, the employee may be given a nominal sum depending on the circumstances,
pursuant to Article 2221 of the Civil Code. HCSEcI
3.
CONSTITUTIONAL LAW; BILL OF RIGHTS; RIGHT TO DUE PROCESS; INCLUDES
EMPLOYMENT. May I just recall that in Wallem Maritime Services v. NLRC, the Court said
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." An objective reading of the
Bill of Rights clearly shows that the due process protection is not limited to government
action alone. The Constitution does not say that the right cannot be claimed against private
individuals and entities. Indeed, the employee is entitled to due process, not because of the
Labor Code, but because of the Constitution. Elementary is the doctrine that constitutional
provisions are deemed written into every statute, contract or undertaking. In the final
analysis, what is involved here is not simply the amount of monetary award whether
insignificant or substantial; whether termed as indemnity, penalty, separation pay or full
back wages. Neither is the subject here merely a matter of respect for workers' rights or
adequate protection of labor. The bottom line is the constitutionally granted right to due
process, which is the very essence of justice itself. Where the rule of law is the bedrock of
our free society, justice is its very lifeblood. A denial of due process is thus no less than a
denial of justice itself.
TINGA, J., separate opinion:
1.
LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; DISMISSAL; NOT
INVALIDATED BY FAILURE OF EMPLOYER TO OBSERVE PROPER NOTICE AND HEARING; AWARD
OF DAMAGES, PROPER. I concur in the result, the final disposition of the petition being
correct. The Court emphatically reaffirms the rule that dismissals for just cause are not
invalidated due to the failure of the employer to observe the proper notice and hearing
requirements under the Labor Code. At the same time, the Decision likewise establishes that
the Civil Code provisions on damages serve as the proper framework for the appropriate
relief to the employee dismissed for just cause if the notice-hearing requirement is not met.

Serrano v. NLRC, insofar as it is controlling in dismissals for unauthorized causes, is no


longer the controlling precedent. Any and all previous rulings and statements of the Court
inconsistent with these determinations are now deemed inoperative.
2.
ID.; ID.; ID.; GROUNDS; ABANDONMENT; UPHELD. As the Decision points out,
abandonment is characterized by the failure to report for work or absence without valid or
justifiable reason, and a clear intention to sever the employer-employee relationship. The
question of whether or not an employee has abandoned employment is essentially a factual
issue. The NLRC and the Court of Appeals, both appropriate triers of fact, concluded that the
Agabons had actually abandoned their employment, thus there is little need for deep inquiry
into the correctness of this factual finding.
3.
ID.; ID.; ID.; REQUISITES. Section 2, Book V, Rule XXIII of the Omnibus Rules
Implementing the Labor Code (Implementing Rules) specifically provides that for termination
of employment based on just causes as defined in Article 282, there must be: (1) written
notice served on the employee specifying the grounds for termination and giving employee
reasonable opportunity to explain his/her side; (2) a hearing or conference wherein the
employee, with the assistance of counsel if so desired, is given opportunity to respond to the
charge, present his evidence or rebut evidence presented against him/her; and (3) written
notice of termination served on the employee indicating that upon due consideration of all
the circumstances, grounds have been established to justify termination. At the same time,
Section 2, Book V, Rule XXIII of the Implementing Rules does not require strict compliance
with the above procedure, but only that the same be "substantially observed."
4.
ID.; ID.; ID.; ID.; NOTICE OF TERMINATION; REQUIRED. The actual violation of the
notice requirement by Riviera Homes lies in its failure to serve on the Agabons the second
notice which should inform them of termination. The importance of sending the notice of
termination should not be trivialized. The termination letter serves as indubitable proof of
loss of employment, and its receipt compels the employee to evaluate his or her next
options. Without such notice, the employee may be left uncertain of his fate; thus, its service
is mandated by the Implementing Rules. Non-compliance with the notice rule, as evident in
this case, contravenes the Implementing Rules.
5.
ID.; ID.; ID.; ID.; ID.; NOT A REQUIREMENT IN PREVIOUS LAWS WHERE TERMINATION
IS FOR JUST CAUSE. Under Section 1 of the Termination Pay Law, an employer could
dismiss an employee without just cause by serving written notice on the employee at least
one month in advance or one-half month for every year of service of the employee,
whichever was longer. Failure to serve such written notice entitled the employee to
compensation equivalent to his salaries or wages corresponding to the required period of
notice from the date of termination of his employment. However, there was no similar
written notice requirement under the Termination Pay Law if the dismissal of the employee
was for just cause. The Court, prior to the enactment of the Labor Code, was ill-receptive to
the notion that termination for just cause without notice or hearing violated the
constitutional right to due process. Nonetheless, the Court recognized an award of damages
as the appropriate remedy. The Termination Pay Law was among the repealed laws with the
enactment of the Labor Code in 1974. Significantly, the Labor Code, in its inception, did not
require notice or hearing before an employer could terminate an employee for just cause.
IaHAcT
6.
ID.; ID.; ID.; ID.; ID.; ABSENCE THEREOF, NOT A VIOLATION OF THE BILL OF RIGHTS.
I do not doubt that requiring notice and hearing prior to termination for just cause is an
admirable sentiment borne out of basic equity and fairness. Still, it is not a constitutional
requirement that can impose itself on the relations of private persons and entities. Simply
put, the Bill of Rights affords protection against possible State oppression against its
citizens, but not against an unjust or repressive conduct by a private party towards another.
That while the Bill of Rights maintains a position of primacy in the constitutional hierarchy, it

has scope and limitations that must be respected and asserted by the Court, even though
they may at times serve somewhat bitter ends.
7.
ID.; ID.; ID.; ID.; ID.; ABSENCE THEREOF, NOT A VIOLATION OF THE PROTECTION OF
LABOR; ELABORATED. The provisions of the 1987 Constitution affirm the primacy of labor
and advocate a multi-faceted state policy that affords, among others, full protection to labor.
In fact, the constitutional protection of labor was entrenched more than eight decades ago,
yet such did not prevent this Court in the past from affirming dismissals for just cause
without valid notice. Nor was there any pretense made that this constitutional maxim
afforded a laborer a positive right against dismissal for just cause on the ground of lack of
valid prior notice. It was only after the enactment of the Labor Code that the doctrine relied
upon by the dissenting opinions became en vogue. This point highlights my position that the
violation of the notice requirement has statutory moorings, not constitutional. It should be
also noted that the 1987 Constitution also recognizes the principle of shared responsibility
between workers and employers, and the right of enterprise to reasonable returns,
expansion, and growth. Whatever perceived imbalance there might have been under
previous incarnations of the provision have been obviated by Section 3, Article XIII. In the
case of Manila Prince Hotel v. GSIS, we affirmed the presumption that all constitutional
provisions are self-executing. We reasoned that to declare otherwise would result in the
pernicious situation wherein by mere inaction and disregard by the legislature, constitutional
mandates would be rendered ineffectual. Thus, the constitutional mandates of protection to
labor and security of tenure may be deemed as self-executing in the sense that these are
automatically acknowledged and observed without need for any enabling legislation.
However, to declare that the constitutional provisions are enough to guarantee the full
exercise of the rights embodied therein, and the realization of ideals therein expressed,
would be impractical, if not unrealistic. The espousal of such view presents the dangerous
tendency of being overbroad and exaggerated. The guarantees of "full protection to labor"
and "security of tenure", when examined in isolation, are facially unqualified, and the
broadest interpretation possible suggests a blanket shield in favor of labor against any form
of removal regardless of circumstance. This interpretation implies an unimpeachable right to
continued employment a utopian notion, doubtless but still hardly within the
contemplation of the framers. Subsequent legislation is still needed to define the parameters
of these guaranteed rights to ensure the protection and promotion, not only the rights of the
labor sector, but of the employers' as well. Without specific and pertinent legislation, judicial
bodies will be at a loss, formulating their own conclusion to approximate at least the aims of
the Constitution. Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a
source of a positive enforceable right to stave off the dismissal of an employee for just cause
owing to the failure to serve proper notice or hearing. As manifested by several framers of
the 1987 Constitution, the provisions on social justice require legislative enactments for their
enforceability. There is no pretense on the part of the framers that the provisions on Social
Justice, particularly Section 3 of Article XIII, are self-executory. Still, considering the rule that
provisions should be deemed self-executing if enforceable without further legislative action,
an examination of Section 3 of Article XIII is warranted to determine whether it is complete
in itself as a definitive law, or if it needs future legislation for completion and enforcement.
Particularly, we should inquire whether or not the provision voids the dismissal of a laborer
for just cause if no valid notice or hearing is attendant. At present, the Labor Code is the
primary mechanism to carry out the Constitution's directives. The necessity for laws
concretizing the constitutional principles on the protection of labor is evident in the reliance
placed upon such laws by the Court in resolving the issue of the validity of a worker's
dismissal. In cases where that was the issue confronting the Court, it consistently recognized
the constitutional right to security of tenure and employed the standards laid down by
prevailing laws in determining whether such right was violated. The Court's reference to laws
other than the Constitution in resolving the issue of dismissal is an implicit acknowledgment
that the right to security of tenure, while recognized in the Constitution, cannot be

implemented uniformly absent a law prescribing concrete standards for its enforcement.
caSEAH
8.
ID.; ID.; ID.; ID.; ID.; DISMISSAL FOR JUST CAUSE DIFFERENT FROM DISMISSAL FOR
AUTHORIZED CAUSE. Dismissals for just cause and dismissals for authorized cause are
governed by different provisions, entail divergent requisites, and animated by distinct
rationales. The language of Article 283 expressly effects the termination for authorized
cause to the service of written notice on the workers and the Ministry of Labor at least one
(1) month before the intended date of termination. This constitutes an eminent difference
than dismissals for just cause, wherein the causal relation between the notice and the
dismissal is not expressly stipulated. The circumstances distinguishing just and authorized
causes are too markedly different to be subjected to the same rules and reasoning in
interpretation.
9.
ID.; ID.; ID.; ID.; ID.; NOT A REQUIREMENT WHERE DISMISSAL WAS FOR A JUST
CAUSE. There is no express provision in the Labor Code that voids a dismissal for just
cause on the ground that there was no notice or hearing. Under Section 279, the employer is
precluded from dismissing an employee except for a just cause as provided in Section 282,
or an authorized cause under Sections 283 and 284. Based on reading Section 279 alone,
the existence of just cause by itself is sufficient to validate the termination. Just cause is
defined by Article 282, which unlike Article 283, does not condition the termination on the
service of written notices. That the remedy of reinstatement despite termination for just
cause is simply not authorized by the Labor Code, neither the Labor Code nor its
implementing rules states that a termination for just cause is voided because the
requirement of notice and hearing was not observed. This is not simply an inadvertent
semantic failure, but a conscious effort to protect the prerogatives of the employer to
dismiss an employee for just cause. The law recognizes the right of the employer to
terminate for just cause. The just causes enumerated under the Labor Code serious
misconduct or willful disobedience, gross and habitual neglect, fraud or willful breach of
trust, commission of a crime by the employee against the employer, and other analogous
causes are characterized by the harmful behavior of an employee against the business or
the person of the employer. These just causes for termination are not negated by the
absence of notice or hearing. In fact, the practical purpose of requiring notice and hearing is
to afford the employee the opportunity to dispute the contention that there was just cause in
the dismissal. Yet it must be understood if a dismissed employee is deprived of the right
to notice and hearing, and thus denied the opportunity to present countervailing evidence
that disputes the finding of just cause, reinstatement will be valid not because the notice
and hearing requirement was not observed, but because there was no just cause in the
dismissal. The opportunity to dispute the finding of the just cause is readily available before
the Labor Arbiter, and the subsequent levels of appellate review. The Labor Code presents
no textually demonstrable commitment to invalidate a dismissal for just cause due to the
absence of notice or hearing. This is not surprising, as such remedy will not restore the
employer or employee into equity. Absent a showing of integral causation, the mutual
infliction of wrongs does not negate either injury, but instead enforces two independent
rights of relief.
10.
ID.; ID.; ID.; BACKWAGES NOT PROPER WHERE EMPLOYEE WAS DISMISSED FOR JUST
CAUSE. I disagree with Serrano insofar as it held that employees terminated for just cause
are to be paid backwages from the time employment was terminated "until it is determined
that the termination is for just cause because the failure to hear him before he is dismissed
renders the termination of his employment without legal effect." Article 279 of the Labor
Code clearly authorizes the payment of backwages only if an employee is unjustly
dismissed. A dismissal for just cause is obviously antithetical to an unjust dismissal. An
award for backwages is not clearly warranted by the law. HSDaTC

11.
ID.; ID.; ID.; SEPARATION PAY NOT PROPER WHERE EMPLOYEE WAS DISMISSED FOR
JUST CAUSE. The formula of one month's pay for every year served does have statutory
basis. It is found though in the Labor Code though, not the Civil Code. Even then, such
computation is made for separation pay under the Labor Code. But separation pay is not an
appropriate as a remedy in this case, or in any case wherein an employee is terminated for
just cause. Separation pay is traditionally a monetary award paid as an alternative to
reinstatement which can no longer be effected in view of the long passage of time or
because of the realities of the situation. However, under Section 7, Rule 1, Book VI of the
Omnibus Rules Implementing the Labor Code, "[t]he separation from work of an employee
for a just cause does not entitle him to the termination pay provided in the Code." Neither
does the Labor Code itself provide instances wherein separation pay is warranted for
dismissals with just cause. Separation pay is warranted only for dismissals for authorized
causes, as enumerated in Article 283 and 284 of the Labor Code.
12.
ID.; ID.; ID.; SEPARATION PAY AS EQUITY NOT PROPER WHERE EMPLOYEE WAS
DISMISSED FOR JUST CAUSE. Admittedly, the Court has in the past authorized the award
of separation pay for duly terminated employees as a measure of social justice, provided
that the employee is not guilty of serious misconduct reflecting on moral character. This
doctrine is inapplicable in this case, as the Agabons are guilty of abandonment, which is the
deliberate and unjustified refusal of an employee to resume his employment. Abandonment
is tantamount to serious misconduct, as it constitutes a willful breach of the employeremployee relationship without cause. The award of separation pay as a measure of social
justice has no statutory basis, but clearly emanates from the Court's so-called "equity
jurisdiction." The Court's equity jurisdiction as a basis for award, no matter what form it may
take, is likewise unwarranted in this case. Easy resort to equity should be avoided, as it
should yield to positive rules which pre-empt and prevail over such persuasions. Abstract as
the concept is, it does not admit to definite and objective standards. The Court deemed an
indemnity award proper without exactly saying where in statute could such award be
derived at. Perhaps, equity or social justice can be invoked as basis for the award. However,
this sort of arbitrariness, indeterminacy and judicial usurpation of legislative prerogatives is
precisely the source of my discontent. Social justice should be the aspiration of all that we
do, yet I think it the more mature attitude to consider that it ebbs and flows within our
statutes, rather than view it as an independent source of funding. aIAEcD
13.
ID.; ID.; ID.; REQUISITES; NOTICE OF TERMINATION; VIOLATION THEREOF; PENALTY;
ARTICLE 288 OF THE LABOR CODE, NOT APPLICABLE. Another putative source of liability
for failure to render the notice requirement is Article 288 of the Labor Code. It is apparent
from the provision that the penalty arises due to contraventions of the provisions of the
Labor Code. It is also clear that the provision comes into play regardless of who the violator
may be. Either the employer or the employee may be penalized, or perhaps even officials
tasked with implementing the Labor Code. However, it is apparent that Article 288 is a penal
provision; hence, the prescription for penalties such as fine and imprisonment. The Article is
also explicit that the imposition of fine or imprisonment is at the "discretion of the court."
Thus, the proceedings under the provision is penal in character. The criminal case has to be
instituted before the proper courts, and the Labor Code violation subject thereof duly proven
in an adversarial proceeding. Hence, Article 288 cannot apply in this case and serve as basis
to impose a penalty on Riviera Homes. I also maintain that under Article 288 the penalty
should be paid to the State, and not to the person or persons who may have suffered injury
as a result of the violation. A penalty is a sum of money which the law requires to be paid by
way of punishment for doing some act which is prohibited or for not doing some act which is
required to be done. A penalty should be distinguished from damages which is the pecuniary
compensation or indemnity to a person who has suffered loss, detriment, or injury, whether
to his person, property, or rights, on account of the unlawful act or omission or negligence of
another. Article 288 clearly serves as a punitive fine, rather than a compensatory measure,
since the provision penalizes an act that violates the Labor Code even if such act does not

cause actual injury to any private person. Independent of the employee's interests protected
by the Labor Code is the interest of the State in seeing to it that its regulatory laws are
complied with. Article 288 is intended to satiate the latter interest. Nothing in the language
of Article 288 indicates an intention to compensate or remunerate a private person for injury
he may have sustained.
14.
ID.; ID.; ID.; ID.; ID.; ID.; ID.; DAMAGES UNDER THE CIVIL CODE, PROPER. The
proper legal basis for holding the employer liable for monetary damages to the employee
dismissed for just cause is the Civil Code. The award of damages should be measured
against the loss or injury suffered by the employee by reason of the employer's violation or,
in case of nominal damages, the right vindicated by the award. This is the proper paradigm
authorized by our law, and designed to obtain the fairest possible relief. Under Section 217
(4) of the Labor Code, the Labor Arbiter has jurisdiction over claims for actual, moral,
exemplary and other forms of damages arising from the employer-employee relations. It is
thus the duty of Labor Arbiters to adjudicate claims for damages, and they should disabuse
themselves of any inhibitions if it does appear that an award for damages is warranted. As
triers of facts in a specialized field, they should attune themselves to the particular
conditions or problems attendant to employer-employee relationships, and thus be in the
best possible position as to the nature and amount of damages that may be warranted in
this case. The damages referred under Section 217 (4) of the Labor Code are those available
under the Civil Code. It is but proper that the Civil Code serve as the basis for the indemnity,
it being the law that regulates the private relations of the members of civil society,
determining their respective rights and obligations with reference to persons, things, and
civil acts. No matter how impressed with the public interest the relationship between a
private employer and employee is, it still is ultimately a relationship between private
individuals. Notably, even though the Labor Code could very well have provided set rules for
damages arising from the employer-employee relationship, referral was instead made to the
concept of damages as enumerated and defined under the Civil Code. ISTCHE
15.
ID.; ID.; ID.; ID.; ID.; ID.; ID.; GUIDELINES WHERE TERMINATION WAS FOR JUST CAUSE;
PROPRIETY OF NOMINAL DAMAGES. Given the long controversy that has dogged this
present issue regarding dismissals for just cause, it is wise to lay down standards that would
guide the proper award of damages under the Civil Code in cases wherein the employer
failed to comply with statutory due process in dismissals for just cause. First. I believe that it
can be maintained as a general rule, that failure to comply with the statutory requirement of
notice automatically gives rise to nominal damages, at the very least, even if the dismissal
was sustained for just cause. Nominal damages are adjudicated in order that a right of a
plaintiff which has been violated or invaded by another may be vindicated or recognized
without having to indemnify the plaintiff for any loss suffered by him. Nominal damages may
likewise be awarded in every obligation arising from law, contracts, quasi-contracts, acts or
omissions punished by law, and quasi-delicts, or where any property right has been invaded.
Clearly, the bare act of failing to observe the notice requirement gives rise to nominal
damages assessable against the employer and due the employee. The Labor Code
indubitably entitles the employee to notice even if dismissal is for just cause, even if there is
no apparent intent to void such dismissals deficiently implemented. It has also been held
that one's employment, profession, trade, or calling is a "property right" and the wrongful
interference therewith gives rise to an actionable wrong. The assessment of nominal
damages is left to the discretion of the court, or in labor cases, of the Labor Arbiter and the
successive appellate levels. The authority to nominate standards governing the award of
nominal damages has clearly been delegated to the judicial branch, and it will serve good
purpose for this Court to provide such guidelines. Considering that the affected right is a
property right, there is justification in basing the amount of nominal damages on the
particular characteristics attaching to the claimant's employment. Factors such as length of
service, positions held, and received salary may be considered to obtain the proper measure
of nominal damages. After all, the degree by which a property right should be vindicated is

affected by the estimable value of such right. At the same time, it should be recognized that
nominal damages are not meant to be compensatory, and should not be computed through
a formula based on actual losses. Consequently, nominal damages are usually limited in
pecuniary value. This fact should be impressed upon the prospective claimant, especially
one who is contemplating seeking actual/compensatory damages. EDcICT
16.
ID.; ID.; ID.; ID.; ID.; ID.; ID.; ID.; PROPRIETY OF ACTUAL OR COMPENSATORY
DAMAGES. Actual or compensatory damages are not available as a matter of right to an
employee dismissed for just cause but denied statutory due process. They must be based on
clear factual and legal bases, and correspond to such pecuniary loss suffered by the
employee as duly proven. Evidently, there is less degree of discretion to award actual or
compensatory damages. I recognize some inherent difficulties in establishing actual
damages in cases for terminations validated for just cause. The dismissed employee retains
no right to continued employment from the moment just cause for termination exists, and
such time most likely would have arrived even before the employer is liable to send the first
notice. As a result, an award of backwages disguised as actual damages would almost never
be justified if the employee was dismissed for just cause. The possible exception would be if
it can be proven the ground for just cause came into being only after the dismissed
employee had stopped receiving wages from the employer. Yet it is not impossible to
establish a case for actual damages if dismissal was for just cause. Particularly actionable,
for example, is if the notices are not served on the employee, thus hampering his/her
opportunities to obtain new employment. For as long as it can be demonstrated that the
failure of the employer to observe procedural due process mandated by the Labor Code is
the proximate cause of pecuniary loss or injury to the dismissed employee, then actual or
compensatory damages may be awarded.
17.
ID.; ID.; ID.; ID.; ID.; ID.; ID.; ID.; PROPRIETY OF TEMPERATE OR MODERATE DAMAGES.
If there is a finding of pecuniary loss arising from the employer violation, but the amount
cannot be proved with certainty, then temperate or moderate damages are available under
Article 2224 of the Civil Code. Again, sufficient discretion is afforded to the adjudicator as
regards the proper award, and the award must be reasonable under the circumstances.
Temperate or nominal damages may yet prove to be a plausible remedy, especially when
common sense dictates that pecuniary loss was suffered, but incapable of precise definition.
18.
ID.; ID.; ID.; ID.; ID.; ID.; ID.; ID.; PROPRIETY OF MORAL AND EXEMPLARY DAMAGES.
Moral and exemplary damages may also be awarded in the appropriate circumstances. As
pointed out by the Decision, moral damages are recoverable where the dismissal of the
employee was attended by bad faith, fraud, or was done in a manner contrary to morals,
good customs or public policy, or the employer committed an act oppressive to labor.
Exemplary damages may avail if the dismissal was effected in a wanton, oppressive or
malevolent manner. HADTEC
DECISION
YNARES-SANTIAGO, J p:
This petition for review seeks to reverse the decision 1 of the Court of Appeals dated January
23, 2003, in CA-G.R. SP No. 63017, modifying the decision of National Labor Relations
Commission (NLRC) in NLRC-NCR Case No. 023442-00. ECcTaS
Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling
and installing ornamental and construction materials. It employed petitioners Virgilio Agabon
and Jenny Agabon as gypsum board and cornice installers on January 2, 1992 2 until
February 23, 1999 when they were dismissed for abandonment of work.

Petitioners then filed a complaint for illegal dismissal and payment of money claims 3 and on
December 28, 1999, the Labor Arbiter rendered a decision declaring the dismissals illegal
and ordered private respondent to pay the monetary claims. The dispositive portion of the
decision states:
WHEREFORE, premises considered, We find the termination of the complainants illegal.
Accordingly, respondent is hereby ordered to pay them their backwages up to November 29,
1999 in the sum of:
1.

Jenny M. Agabon P56,231.93

2.

Virgilio C. Agabon 56,231.93

and, in lieu of reinstatement to pay them their separation pay of one (1) month for every
year of service from date of hiring up to November 29, 1999.
Respondent is further ordered to pay the complainants their holiday pay and service
incentive leave pay for the years 1996, 1997 and 1998 as well as their premium pay for
holidays and rest days and Virgilio Agabon's 13th month pay differential amounting to TWO
THOUSAND ONE HUNDRED FIFTY (P2,150.00) Pesos, or the aggregate amount of ONE
HUNDRED TWENTY ONE THOUSAND SIX HUNDRED SEVENTY EIGHT & 93/100 (P121,678.93)
Pesos for Jenny Agabon, and ONE HUNDRED TWENTY THREE THOUSAND EIGHT HUNDRED
TWENTY EIGHT & 93/100 (P123,828.93) Pesos for Virgilio Agabon, as per attached
computation of Julieta C. Nicolas, OIC, Research and Computation Unit, NCR.
SO ORDERED. 4
On appeal, the NLRC reversed the Labor Arbiter because it found that the petitioners had
abandoned their work, and were not entitled to backwages and separation pay. The other
money claims awarded by the Labor Arbiter were also denied for lack of evidence. 5
Upon denial of their motion for reconsideration, petitioners filed a petition for certiorari with
the Court of Appeals.
The Court of Appeals in turn ruled that the dismissal of the petitioners was not illegal
because they had abandoned their employment but ordered the payment of money claims.
The dispositive portion of the decision reads:
WHEREFORE, the decision of the National Labor Relations Commission is REVERSED only
insofar as it dismissed petitioner's money claims. Private respondents are ordered to pay
petitioners holiday pay for four (4) regular holidays in 1996, 1997, and 1998, as well as their
service incentive leave pay for said years, and to pay the balance of petitioner Virgilio
Agabon's 13th month pay for 1998 in the amount of P2,150.00. aIcCTA
SO ORDERED. 6
Hence, this petition for review on the sole issue of whether petitioners were illegally
dismissed. 7
Petitioners assert that they were dismissed because the private respondent refused to give
them assignments unless they agreed to work on a "pakyaw" basis when they reported for
duty on February 23, 1999. They did not agree on this arrangement because it would mean
losing benefits as Social Security System (SSS) members. Petitioners also claim that private
respondent did not comply with the twin requirements of notice and hearing. 8
Private respondent, on the other hand, maintained that petitioners were not dismissed but
had abandoned their work. 9 In fact, private respondent sent two letters to the last known

addresses of the petitioners advising them to report for work. Private respondent's manager
even talked to petitioner Virgilio Agabon by telephone sometime in June 1999 to tell him
about the new assignment at Pacific Plaza Towers involving 40,000 square meters of cornice
installation work. However, petitioners did not report for work because they had
subcontracted to perform installation work for another company. Petitioners also demanded
for an increase in their wage to P280.00 per day. When this was not granted, petitioners
stopped reporting for work and filed the illegal dismissal case. 10
It is well-settled that findings of fact of quasi-judicial agencies like the NLRC are accorded not
only respect but even finality if the findings are supported by substantial evidence. This is
especially so when such findings were affirmed by the Court of Appeals. 11 However, if the
factual findings of the NLRC and the Labor Arbiter are conflicting, as in this case, the
reviewing court may delve into the records and examine for itself the questioned findings.
12
Accordingly, the Court of Appeals, after a careful review of the facts, ruled that petitioners'
dismissal was for a just cause. They had abandoned their employment and were already
working for another employer.
To dismiss an employee, the law requires not only the existence of a just and valid cause but
also enjoins the employer to give the employee the opportunity to be heard and to defend
himself. 13 Article 282 of the Labor Code enumerates the just causes for termination by the
employer: (a) serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or the 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. DaEcTC
Abandonment is the deliberate and unjustified refusal of an employee to resume his
employment. 14 It is a form of neglect of duty, hence, a just cause for termination of
employment by the employer. 15 For a valid finding of abandonment, these two factors
should be present: (1) the failure to report for work or absence without valid or justifiable
reason; and (2) a clear intention to sever employer-employee relationship, with the second
as the more determinative factor which is manifested by overt acts from which it may be
deduced that the employees has no more intention to work. The intent to discontinue the
employment must be shown by clear proof that it was deliberate and unjustified. 16
In February 1999, petitioners were frequently absent having subcontracted for an installation
work for another company. Subcontracting for another company clearly showed the intention
to sever the employer-employee relationship with private respondent. This was not the first
time they did this. In January 1996, they did not report for work because they were working
for another company. Private respondent at that time warned petitioners that they would be
dismissed if this happened again. Petitioners disregarded the warning and exhibited a clear
intention to sever their employer-employee relationship. The record of an employee is a
relevant consideration in determining the penalty that should be meted out to him. 17
In Sandoval Shipyard v. Clave, 18 we held that an employee who deliberately absented from
work without leave or permission from his employer, for the purpose of looking for a job
elsewhere, is considered to have abandoned his job. We should apply that rule with more
reason here where petitioners were absent because they were already working in another
company.
The law imposes many obligations on the employer such as providing just compensation to
workers, observance of the procedural requirements of notice and hearing in the termination

of employment. On the other hand, the law also recognizes the right of the employer to
expect from its workers not only good performance, adequate work and diligence, but also
good conduct 19 and loyalty. The employer may not be compelled to continue to employ
such persons whose continuance in the service will patently be inimical to his interests. 20
After establishing that the terminations were for a just and valid cause, we now determine if
the procedures for dismissal were observed.
The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of the
Omnibus Rules Implementing the Labor Code:
Standards of due process: requirements of notice. In all cases of termination of
employment, the following standards of due process shall be substantially observed:
I.
For termination of employment based on just causes as defined in Article 282 of the
Code:
(a)
A written notice served on the employee specifying the ground or grounds for
termination, and giving to said employee reasonable opportunity within which to explain his
side; CaEATI
(b)
A hearing or conference during which the employee concerned, with the assistance of
counsel if the employee so desires, is given opportunity to respond to the charge, present
his evidence or rebut the evidence presented against him; and
(c)
A written notice of termination served on the employee indicating that upon due
consideration of all the circumstances, grounds have been established to justify his
termination.
In case of termination, the foregoing notices shall be served on the employee's last known
address.
Dismissals based on just causes contemplate acts or omissions attributable to the employee
while dismissals based on authorized causes involve grounds under the Labor Code which
allow the employer to terminate employees. A termination for an authorized cause requires
payment of separation pay. When the termination of employment is declared illegal,
reinstatement and full backwages are mandated under Article 279. If reinstatement is no
longer possible where the dismissal was unjust, separation pay may be granted.
Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer
must give the employee two written notices and a hearing or opportunity to be heard if
requested by the employee before terminating the employment: a notice specifying the
grounds for which dismissal is sought a hearing or an opportunity to be heard and after
hearing or opportunity to be heard, a notice of the decision to dismiss; and (2) if the
dismissal is based on authorized causes under Articles 283 and 284, the employer must give
the employee and the Department of Labor and Employment written notices 30 days prior to
the effectivity of his separation.
From the foregoing rules four possible situations may be derived: (1) the dismissal is for a
just cause under Article 282 of the Labor Code, for an authorized cause under Article 283, or
for health reasons under Article 284, and due process was observed; (2) the dismissal is
without just or authorized cause but due process was observed; (3) the dismissal is without
just or authorized cause and there was no due process; and (4) the dismissal is for just or
authorized cause but due process was not observed.
In the first situation, the dismissal is undoubtedly valid and the employer will not suffer any
liability.

In the second and third situations where the dismissals are illegal, Article 279 mandates that
the employee is entitled to reinstatement without loss of seniority rights and other privileges
and full backwages, inclusive of allowances, and other benefits or their monetary equivalent
computed from the time the compensation was not paid up to the time of actual
reinstatement.
In the fourth situation, the dismissal should be upheld. While the procedural infirmity cannot
be cured, it should not invalidate the dismissal. However, the employer should be held liable
for non-compliance with the procedural requirements of due process. DcCIAa
The present case squarely falls under the fourth situation. The dismissal should be upheld
because it was established that the petitioners abandoned their jobs to work for another
company. Private respondent, however, did not follow the notice requirements and instead
argued that sending notices to the last known addresses would have been useless because
they did not reside there anymore. Unfortunately for the private respondent, this is not a
valid excuse because the law mandates the twin notice requirements to the employee's last
known address. 21 Thus, it should be held liable for non-compliance with the procedural
requirements of due process.
A review and re-examination of the relevant legal principles is appropriate and timely to
clarify the various rulings on employment termination in the light of Serrano v. National
Labor Relations Commission. 22
Prior to 1989, the rule was that a dismissal or termination is illegal if the employee was not
given any notice. In the 1989 case of Wenphil Corp. v. National Labor Relations Commission,
23 we reversed this long-standing rule and held that the dismissed employee, although not
given any notice and hearing, was not entitled to reinstatement and backwages because the
dismissal was for grave misconduct and insubordination, a just ground for termination under
Article 282. The employee had a violent temper and caused trouble during office hours,
defying superiors who tried to pacify him. We concluded that reinstating the employee and
awarding backwages "may encourage him to do even worse and will render a mockery of
the rules of discipline that employees are required to observe." 24 We further held that:
Under the circumstances, the dismissal of the private respondent for just cause should be
maintained. He has no right to return to his former employment.
However, the petitioner must nevertheless be held to account for failure to extend to private
respondent his right to an investigation before causing his dismissal. The rule is explicit as
above discussed. The dismissal of an employee must be for just or authorized cause and
after due process. Petitioner committed an infraction of the second requirement. Thus, it
must be imposed a sanction for its failure to give a formal notice and conduct an
investigation as required by law before dismissing petitioner from employment. Considering
the circumstances of this case petitioner must indemnify the private respondent the amount
of P1,000.00. The measure of this award depends on the facts of each case and the gravity
of the omission committed by the employer. 25
The rule thus evolved: where the employer had a valid reason to dismiss an employee but
did not follow the due process requirement, the dismissal may be upheld but the employer
will be penalized to pay an indemnity to the employee. This became known as the Wenphil
or Belated Due Process Rule. AcIaST
On January 27, 2000, in Serrano, the rule on the extent of the sanction was changed. We
held that the violation by the employer of the notice requirement in termination for just or
authorized causes was not a denial of due process that will nullify the termination. However,
the dismissal is ineffectual and the employer must pay full backwages from the time of
termination until it is judicially declared that the dismissal was for a just or authorized cause.

The rationale for the re-examination of the Wenphil doctrine in Serrano was the significant
number of cases involving dismissals without requisite notices. We concluded that the
imposition of penalty by way of damages for violation of the notice requirement was not
serving as a deterrent. Hence, we now required payment of full backwages from the time of
dismissal until the time the Court finds the dismissal was for a just or authorized cause.
Serrano was confronting the practice of employers to "dismiss now and pay later" by
imposing full backwages.
We believe, however, that the ruling in Serrano did not consider the full meaning of Article
279 of the Labor Code which states:
ART. 279.
Security of Tenure. In cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause or when authorized by this
Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from the time
his compensation was withheld from him up to the time of his actual reinstatement.
This means that the termination is illegal only if it is not for any of the justified or authorized
causes provided by law. Payment of backwages and other benefits, including reinstatement,
is justified only if the employee was unjustly dismissed.
The fact that the Serrano ruling can cause unfairness and injustice which elicited strong
dissent has prompted us to revisit the doctrine.
To be sure, the Due Process Clause in Article III, Section 1 of the Constitution embodies a
system of rights based on moral principles so deeply imbedded in the traditions and feelings
of our people as to be deemed fundamental to a civilized society as conceived by our entire
history. Due process is that which comports with the deepest notions of what is fair and right
and just. 26 It is a constitutional restraint on the legislative as well as on the executive and
judicial powers of the government provided by the Bill of Rights. acEHSI
Due process under the Labor Code, like Constitutional due process, has two aspects:
substantive, i.e., the valid and authorized causes of employment termination under the
Labor Code; and procedural, i.e., the manner of dismissal. Procedural due process
requirements for dismissal are found in the Implementing Rules of P.D. 442, as amended,
otherwise known as the Labor Code of the Philippines in Book VI, Rule I, Sec. 2, as amended
by Department Order Nos. 9 and 10. 27 Breaches of these due process requirements violate
the Labor Code. Therefore statutory due process should be differentiated from failure to
comply with constitutional due process.
Constitutional due process protects the individual from the government and assures him of
his rights in criminal, civil or administrative proceedings; while statutory due process found
in the Labor Code and Implementing Rules protects employees from being unjustly
terminated without just cause after notice and hearing.
In Sebuguero v. National Labor Relations Commission, 28 the dismissal was for a just and
valid cause but the employee was not accorded due process. The dismissal was upheld by
the Court but the employer was sanctioned. The sanction should be in the nature of
indemnification or penalty, and depends on the facts of each case and the gravity of the
omission committed by the employer.
In Nath v. National Labor Relations Commission, 29 it was ruled that even if the employee
was not given due process, the failure did not operate to eradicate the just causes for
dismissal. The dismissal being for just cause, albeit without due process, did not entitle the
employee to reinstatement, backwages, damages and attorney's fees.

Mr. Justice Jose C. Vitug, in his separate opinion in MGG Marine Services, Inc. v. National
Labor Relations Commission, 30 which opinion he reiterated in Serrano, stated:
C.
Where there is just cause for dismissal but due process has not been properly
observed by an employer, it would not be right to order either the reinstatement of the
dismissed employee or the payment of backwages to him. In failing, however, to comply
with the procedure prescribed by law in terminating the services of the employee, the
employer must be deemed to have opted or, in any case, should be made liable, for the
payment of separation pay. It might be pointed out that the notice to be given and the
hearing to be conducted generally constitute the two-part due process requirement of law to
be accorded to the employee by the employer. Nevertheless, peculiar circumstances might
obtain in certain situations where to undertake the above steps would be no more than a
useless formality and where, accordingly, it would not be imprudent to apply the res ipsa
loquitur rule and award, in lieu of separation pay, nominal damages to the employee. . . . 31
After carefully analyzing the consequences of the divergent doctrines in the law on
employment termination, we believe that in cases involving dismissals for cause but without
observance of the twin requirements of notice and hearing, the better rule is to abandon the
Serrano doctrine and to follow Wenphil by holding that the dismissal was for just cause but
imposing sanctions on the employer. Such sanctions, however, must be stiffer than that
imposed in Wenphil. By doing so, this Court would be able to achieve a fair result by
dispensing justice not just to employees, but to employers as well. DTAHEC
The unfairness of declaring illegal or ineffectual dismissals for valid or authorized causes but
not complying with statutory due process may have far-reaching consequences.
This would encourage frivolous suits, where even the most notorious violators of company
policy are rewarded by invoking due process. This also creates absurd situations where there
is a just or authorized cause for dismissal but a procedural infirmity invalidates the
termination. Let us take for example a case where the employee is caught stealing or
threatens the lives of his co-employees or has become a criminal, who has fled and cannot
be found, or where serious business losses demand that operations be ceased in less than a
month. Invalidating the dismissal would not serve public interest. It could also discourage
investments that can generate employment in the local economy.
The constitutional policy to provide full protection to labor is not meant to be a sword to
oppress employers. The commitment of this Court to the cause of labor does not prevent us
from sustaining the employer when it is in the right, as in this case. 32 Certainly, an
employer should not be compelled to pay employees for work not actually performed and in
fact abandoned.
The employer should not be compelled to continue employing a person who is admittedly
guilty of misfeasance or malfeasance and whose continued employment is patently inimical
to the employer. The law protecting the rights of the laborer authorizes neither oppression
nor self-destruction of the employer. 33
It must be stressed that in the present case, the petitioners committed a grave offense, i.e.,
abandonment, which, if the requirements of due process were complied with, would
undoubtedly result in a valid dismissal.
An employee who is clearly guilty of conduct violative of Article 282 should not be protected
by the Social Justice Clause of the Constitution. Social justice, as the term suggests, should
be used only to correct an injustice. As the eminent Justice Jose P. Laurel observed, social
justice must be founded on the recognition of the necessity of interdependence among
diverse units of a society and of the protection that should be equally and evenly extended
to all groups as a combined force in our social and economic life, consistent with the

fundamental and paramount objective of the state of promoting the health, comfort, and
quiet of all persons, and of bringing about "the greatest good to the greatest number." 34
This is not to say that the Court was wrong when it ruled the way it did in Wenphil, Serrano
and related cases. Social justice is not based on rigid formulas set in stone. It has to allow for
changing times and circumstances. TIcAaH
Justice Isagani Cruz strongly asserts the need to apply a balanced approach to labormanagement relations and dispense justice with an even hand in every case:
We have repeatedly stressed that social justice or any justice for that matter is for the
deserving, whether he be a millionaire in his mansion or a pauper in his hovel. It is true that,
in case of reasonable doubt, we are to tilt the balance in favor of the poor to whom the
Constitution fittingly extends its sympathy and compassion. But never is it justified to give
preference to the poor simply because they are poor, or reject the rich simply because they
are rich, for justice must always be served for the poor and the rich alike, according to the
mandate of the law. 35
Justice in every case should only be for the deserving party. It should not be presumed that
every case of illegal dismissal would automatically be decided in favor of labor, as
management has rights that should be fully respected and enforced by this Court. As
interdependent and indispensable partners in nation-building, labor and management need
each other to foster productivity and economic growth; hence, the need to weigh and
balance the rights and welfare of both the employee and employer.
Where the dismissal is for a just cause, as in the instant case, the lack of statutory due
process should not nullify the dismissal, or render it illegal, or ineffectual. However, the
employer should indemnify the employee for the violation of his statutory rights, as ruled in
Reta v. National Labor Relations Commission. 36 The indemnity to be imposed should be
stiffer to discourage the abhorrent practice of "dismiss now, pay later," which we sought to
deter in the Serrano ruling. The sanction should be in the nature of indemnification or
penalty and should depend on the facts of each case, taking into special consideration the
gravity of the due process violation of the employer.
Under the Civil Code, nominal damages is adjudicated in order that a right of the plaintiff,
which has been violated or invaded by the defendant, may be vindicated or recognized, and
not for the purpose of indemnifying the plaintiff for any loss suffered by him. 37
As enunciated by this Court in Viernes v. National Labor Relations Commissions, 38 an
employer is liable to pay indemnity in the form of nominal damages to an employee who has
been dismissed if, in effecting such dismissal, the employer fails to comply with the
requirements of due process. The Court, after considering the circumstances therein, fixed
the indemnity at P2,590.50, which was equivalent to the employee's one month salary. This
indemnity is intended not to penalize the employer but to vindicate or recognize the
employee's right to statutory due process which was violated by the employer. 39
The violation of the petitioners' right to statutory due process by the private respondent
warrants the payment of indemnity in the form of nominal damages. The amount of such
damages is addressed to the sound discretion of the court, taking into account the relevant
circumstances. 40 Considering the prevailing circumstances in the case at bar, we deem it
proper to fix it at P30,000.00. We believe this form of damages would serve to deter
employers from future violations of the statutory due process rights of employees. At the
very least, it provides a vindication or recognition of this fundamental right granted to the
latter under the Labor Code and its Implementing Rules. ISTECA

Private respondent claims that the Court of Appeals erred in holding that it failed to pay
petitioners' holiday pay, service incentive leave pay and 13th month pay.
We are not persuaded.
We affirm the ruling of the appellate court on petitioners' money claims. Private respondent
is liable for petitioners' holiday pay, service incentive leave pay and 13th month pay without
deductions.
As a general rule, one who pleads payment has the burden of proving it. Even where the
employee must allege non-payment, the general rule is that the burden rests on the
employer to prove payment, rather than on the employee to prove non-payment. The reason
for the rule is that the pertinent personnel files, payrolls, records, remittances and other
similar documents which will show that overtime, differentials, service incentive leave and
other claims of workers have been paid are not in the possession of the worker but in the
custody and absolute control of the employer. 41
In the case at bar, if private respondent indeed paid petitioners' holiday pay and service
incentive leave pay, it could have easily presented documentary proofs of such monetary
benefits to disprove the claims of the petitioners. But it did not, except with respect to the
13th month pay wherein it presented cash vouchers showing payments of the benefit in the
years disputed. 42 Allegations by private respondent that it does not operate during holidays
and that it allows its employees 10 days leave with pay, other than being self-serving, do not
constitute proof of payment. Consequently, it failed to discharge the onus probandi thereby
making it liable for such claims to the petitioners.
Anent the deduction of SSS loan and the value of the shoes from petitioner Virgilio Agabon's
13th month pay, we find the same to be unauthorized. The evident intention of Presidential
Decree No. 851 is to grant an additional income in the form of the 13th month pay to
employees not already receiving the same 43 so as "to further protect the level of real
wages from the ravages of world-wide inflation." 44 Clearly, as additional income, the 13th
month pay is included in the definition of wage under Article 97(f) of the Labor Code, to wit:
(f)
"Wage" paid to any employee shall mean the remuneration or earnings, however
designated, capable of being expressed in terms of money whether fixed or ascertained on a
time, task, piece, or commission basis, or other method of calculating the same, which is
payable by an employer to an employee under a written or unwritten contract of
employment for work done or to be done, or for services rendered or to be rendered and
includes the fair and reasonable value, as determined by the Secretary of Labor, of board,
lodging, or other facilities customarily furnished by the employer to the employee. . . ."
from which an employer is prohibited under Article 113 45 of the same Code from making
any deductions without the employee's knowledge and consent. In the instant case, private
respondent failed to show that the deduction of the SSS loan and the value of the shoes
from petitioner Virgilio Agabon's 13th month pay was authorized by the latter. The lack of
authority to deduct is further bolstered by the fact that petitioner Virgilio Agabon included
the same as one of his money claims against private respondent. STCDaI
The Court of Appeals properly reinstated the monetary claims awarded by the Labor Arbiter
ordering the private respondent to pay each of the petitioners holiday pay for four regular
holidays from 1996 to 1998, in the amount of P6,520.00, service incentive leave pay for the
same period in the amount of P3,255.00 and the balance of Virgilio Agabon's thirteenth
month pay for 1998 in the amount of P2,150.00.
WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of the Court of
Appeals dated January 23, 2003, in CA-G.R. SP No. 63017, finding that petitioners' Jenny and

Virgilio Agabon abandoned their work, and ordering private respondent to pay each of the
petitioners holiday pay for four regular holidays from 1996 to 1998, in the amount of
P6,520.00, service incentive leave pay for the same period in the amount of P3,255.00 and
the balance of Virgilio Agabon's thirteenth month pay for 1998 in the amount of P2,150.00 is
AFFIRMED with the MODIFICATION that private respondent Riviera Home Improvements, Inc.
is further ORDERED to pay each of the petitioners the amount of P30,000.00 as nominal
damages for non-compliance with statutory due process.
No costs.
SO ORDERED.
Quisumbing, Carpio, Carpio-Morales, Callejo, Sr. and Azcuna, JJ ., concur.
Davide, Jr., C .J ., I join Mr. Justice Puno in his dissenting opinion.
Puno and Panganiban, JJ., See dissenting opinion.
Sandoval-Gutierrez, J ., I join Justice Puno in his dissent.
Austria-Martinez, J ., I join in the separate opinion of Justice Tinga.
Corona, J ., is on leave.
Tinga, J ., In the result, per separate opinion.
Chico-Nazario, J ., concurs in J. Puno's dissenting opinion.
Garcia, J ., I join J. Puno's dissenting opinion.
Separate Opinions
PUNO, J., dissenting:
"Strike if you will, but hear me first!" was adjuration of Themistocles, c. 528462 B.C.,
Athenian General and Statesman, to Eurybiades, Admiral of the Spartan fleet, who, in an
argument, raised his staff as though to strike him. 1 It was the same plea, centuries later, of
petitioner-employees Jenny M. Agabon and Virgilio C. Agabon to their employer who fired
them from their jobs without hearing them first. ESaITA
In the last two decades, this Court has wrestled with due process issues in dismissal cases.
In February 1989, Wenphil Corporation v. National Labor Relations Commission 2 put an
abrupt end to the long-standing doctrine nullifying the dismissal of an employee even if
based on a just or authorized cause, if done without prior notice to the employee. Wenphil
upheld the dismissal of a crew of a fast food chain for just cause even if it was effected
without the requisite notice. And in compensation for the deprivation of his prior right to
notice and investigation before dismissal, he was given a measly sum of P1,000.00. Since
then, lowly employees have been cut-off from their bloodline their jobs without due
process of law.
A decade later, we re-examined Wenphil in Serrano v. National Labor Relations Commission
3 but the struggle of our employees for job security turned from bad to worse. In Serrano,
the majority held 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."
4 Thus, the dismissal without prior notice was further legalized and the dismissed employee
was simply awarded some crumbs backwages from the time his employment was

terminated until it was determined that the termination was for an authorized cause. I
dissented and voted for the return of the pre-Wenphil rule to stop the pernicious practice of
dismissals without prior notice.
After four years of the Serrano rule, I see no reason to relent from my Dissenting Opinion as
the situation has even turned from worse to worst. Agabon is doing away with the crumbs
and is leaving the employee with no more than a tiny bit of grain. As such, I feel the strong
urgency to right away revert to the pre-Wenphil era to rectify a grave error and atone for the
wanton, albeit now licensed, violation of the pre-dismissal notice requirement committed by
employers with twisted ethos.
There are enduring reasons for resisting Wenphil, its clone Serrano, and now their offspring
Agabon. As I said in Serrano
Our ten (10) years experience with Wenphil is not a happy one. Unscrupulous employers
have abused the Wenphil ruling. They have dismissed without notice employees including
those who are not as eminently undesirable as the Wenphil employee. They dismissed
employees without notice as a general rule when it should be the exception. The purpose of
the pre-dismissal notice requirement was entirely defeated by employers who were just too
willing to pay an indemnity for its violation. The result, as the majority concedes, is that the
indemnity we imposed has not been effective to prevent unjust dismissals of employees. To
be sure, this is even a supreme understatement. The ugly truth is that Wenphil is the mother
of many unjust and unauthorized dismissals of employees who are too weak to challenge
their powerful employers. acCETD
As the Wenphil indemnity doctrine has proved to be highly inimical to the interest of our
employees, I humbly submit a return to the pre-Wenphil rule where a reasonless violation of
the pre-dismissal notice requirement makes the dismissal of an employee illegal and results
in his reinstatement. In fine, we should strike down as illegal the dismissal of an employee
even if it is for a justified end if it is done thru unjustified means for we cannot be disciples of
the Machiavellian doctrine of the end justifies the means. With due respect, the majority
decision comes too near this mischievous doctrine by giving emphasis on the end and not
on the means of dismissal of employees. What grates is that the majority today espouses a
doctrine more pernicious than Wenphil for now it announces that a violation of the predismissal notice requirement does not even concern due process. The reasons relied upon
by the majority for this new ruling against the job security of employees cannot inspire
assent.
xxx

xxx

xxx

The new ruling of the majority erodes the sanctity of the most important right of an
employee, his constitutional right to security of tenure. This right will never be respected by
the employer if we merely honor the right with a price tag. The policy of "dismiss now and
pay later" favors [moneyed] employers and is a mockery of the right of employees to social
justice. There is no way to justify this pro-employer stance when the 1987 Constitution is
undeniably more pro-employee than our previous fundamental laws. Section 18 of Article 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 the 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. 5
The instant case is a perfect portrait of this reversal of fortune. On January 2, 1992,
petitioners Jenny Agabon and Virgilio Agabon were hired as gypsum board and cornice
installers by respondent Riviera Home Improvements, Inc., a corporation engaged in the
business of selling and installing ornamental and construction materials. Seven (7) years
later, on February 23, 1999, their services were terminated on the ground of abandonment
of work. Apparently, petitioners were subcontracting installation jobs for another company
and were frequently absent from work. Thus, when petitioners reported for work on February
23, 1999, respondent company simply refused to reemploy them unless they agree to work
on a "pakyaw" basis. Petitioners demurred since this would mean losing their benefits. They
were given their walking papers without according them the twin requirements of notice and
hearing. Respondent company stated that they abandoned their jobs. Hence, petitioners
filed a complaint for illegal dismissal and payment of money claims against respondent
company. TaSEHC
On December 28, 1999, the Labor Arbiter held that the dismissal of petitioners was illegal
and ordered respondent company to pay them backwages, holiday and service incentive
leave pay, and separation pay in lieu of reinstatement. On appeal, the NLRC reversed the
decision of the Labor Arbiter and ruled that the latter erred in awarding backwages and
separation pay to petitioners who deliberately abandoned their work. On certiorari, the Court
of Appeals affirmed the findings of the NLRC but ordered respondent company to pay
petitioners their money claims. Hence, this petition for review on the lone issue of whether
petitioners were illegally dismissed from the service.
While I appreciate the view of Mme. Justice Ynares-Santiago that "[t]he indemnity to be
imposed should be stiffer in order to discourage the abhorrent practice of 'dismiss now, pay
later,'" 6 the majority, however, simply retained, if not diminished, the indemnity granted to
the dismissed employees. Consequently, I respectfully dissent and maintain my view that
the workingman's right to job security and due process of law cannot be measured with a
reduced price tag. The majority opinion treats an employee's right to due process as no
more than an abstract declaration. I am unwilling to diminish petitioners' constitutional right
to procedural due process which is necessary to protect their security of tenure. I proffer the
following precepts:
One. Our Constitution is an ode to social justice. The Court should give due obeisance to this
ode for social justice is not a mere euphony of words. In other countries, political debates
over the last two centuries continue to rage on whether social rights should be given
constitutional protection. 7 In our jurisdiction, however, constitutional social rights have long
been embedded in all our Constitutions, and thus at the very least should be respected and
protected by our courts.
Social justice is that virtue by which individuals and groups fulfill their obligations to human
society by contributing positively to the complete well-being of their fellowmen considered
as members of that society, and hence regulate all their actions accordingly. 8 Social justice
as a creed in the 1935 Constitution was crafted by Delegate Jose C. Locsin. He persistently
pounced on the necessity of including social justice in the Constitution to protect those who
have little in life. In the course of the debates, the core concept of social justice was
developed to mean
. . . justice to the common tao, the "little man" so-called. It means justice to him, his wife,
and children in relation to their employers in the factories, in the farms, in the mines, and in
other employments. It means justice to him in the education of his children in the schools, in
his dealings with the different offices of the government, including the courts of justice. 9

1935 Constitution
Thus, Article II (Declaration of Principles), Section 5 of the 1935 Constitution, provides that
"[t]he promotion of social justice to insure the well-being and economic security of all the
people should be the concern of the State." Mr. Justice Jose Laurel, in his concurring opinion
in the main case of Ang Tibay v. Court of Industrial Relations, 10 explained the constitutional
milestone
Our Constitution was adopted in the midst of surging unrest and dissatisfaction resulting
from economic and social distress which was threatening the stability of governments the
world over. Alive to the social and economic forces at work, the framers of our Constitution
boldly met the problems and difficulties which faced them and endeavored to crystallize,
with more or less fidelity, the political, social and economic propositions of their age . . . (by
inserting) general provisions in the Constitution which are intended to bring about the
needed social and economic equilibrium between component elements of society through
the application of what may be termed as the justitia communis advocated by Grotius and
Leibinitz many years ago to be secured through the counterbalancing of economic and social
forces and opportunities which should be regulated, if not controlled by the State or placed,
as it were, in custodia societatis. "The promotion of social justice to insure the well-being
and economic security of all the people" was thus inserted as a vital principle in our
Constitution. 11
And, as quoted in the 1940 case of Antamok Goldlfields Mining Company v. Court of
Industrial Relations, 12 this Court held that in order that the declaration of the principle of
social justice "may not just be an empty medley of words, the Constitution in various
sections thereof has provided the means towards its realization." 13 Thus, the promotion of
the welfare of the working classes was concretized in Article XIII (General Provisions),
Section 6, which mandates that "[t]he State shall afford protection to labor, especially to
working women and minors, and shall regulate the relations . . . between labor and capital in
industry and in agriculture. The State may provide for compulsory arbitration." EcDSHT
Delegate Locsin even exerted a last-ditch effort to amend the draft of the constitutional
provision on labor to read in part, "[t]he State recognizes the right of all workers to work and
shall enact laws protecting labor." In defense of his substitute amendment, Delegate Locsin
in a stirring speech dwelt on the necessity of paying more attention to the needs of the
working class and of including in the Constitution a provision guaranteeing to all workers the
right to work. His substitute amendment was however defeated, but only because his ideas
were already said to be within the scope of the constitutional provisions on social justice and
on labor which was then being considered. 14
As early as Calalang v. Williams, 15 the Court already threw in some wind of caution
The promotion of social justice, however, is to be achieved not through a mistaken sympathy
towards any given group. Social justice is "neither communism, nor despotism, nor atomism,
nor anarchy," but the humanization of laws and the equalization of social and economic
forces by the State so that justice in its rational and objectively secular conception may at
least be approximated. Social justice means the promotion of the welfare of all the people,
the adoption by the Government of measures calculated to [e]nsure economic stability of all
the competent elements of society, through the maintenance of a proper economic and
social equilibrium in the interrelations of the members of the community, constitutionally,
through the adoption of measures legally justifiable, or extra-constitutionally, through the
exercise of powers underlying the existence of all governments on the time-honored
principle of salus populi est suprema lex. 16
Social justice, therefore, must be founded on the recognition of the necessity of
interdependence among divers and diverse units of a society and of the protection that

should be equally and evenly extended to all groups as a combined force in our social and
economic life, consistent with the fundamental and paramount objective of the state of
promoting the health, comfort, and quiet of all persons, and of bringing about "the greatest
good to the greatest number." 17
Indeed, in light of the accelerated pace of Philippine industrialization then, the Filipinos who
used to be more or less anchored to the soil and living comparatively simple lives were fast
becoming full-fledged members of the complex and impersonal industrial society. They and
their families were entirely at the mercy of the severities of the labor system. They were
wholly dependent for their subsistence, sustenance and sheer survival on a job and regular
wage.
In time, Mr. Chief Justice Enrique M. Fernando drew the arches of social justice as follows:
What is thus stressed is that a fundamental principle as social justice, identified as it is with
the broad scope of police power, has an even more basic role to play in aiding those whose
lives are spent in toil, with destitution an ever-present threat, to attain a certain degree of
economic well-being. Precisely, through the social justice coupled with the protection to
labor provisions, the government is enabled to pursue an active and militant policy to give
reality and substance to the proclaimed aspiration of a better life and more decent living
conditions for all. It is in that spirit that in 1969, in Del Rosario vs. Delos Santos (L-20586,
March 21, 1969, 22 SCRA 1196), reference was made to what the social justice concept
signifies in the realistic language of the late President Magsaysay: "He who has less in life
should have more in law." After tracing the course of decisions which spoke uniformly to the
effect that the tenancy legislation, now on the statute books, is not vitiated by constitutional
infirmity, the Del Rosario opinion made clear why it is easily understandable "from the
enactment of the Constitution with its avowed concern for those who have less in life, [that]
the constitutionality of such legislation has been repeatedly upheld." What is sought to be
accomplished by the above fundamental principle is to assure the effectiveness of the
community's effort to assist the economically underprivileged. For under existing conditions,
without succor and support, they might not, unaided, be able to secure justice for
themselves. 18
1973 Constitution
The 1973 Constitution carried over the concept of social justice under the 1935 Constitution.
19 Article II (Declaration of Principles and State Policies), Section 6 of the 1973 Constitution,
provides that "[t]he State shall promote social justice to ensure the dignity, welfare, and
security of all the people. Towards this end, the State shall regulate the acquisition,
ownership, use, enjoyment, and disposition of private property, and equitably diffuse
property ownership and profits." Its counterpart provision on labor was specific and
categorical. Article II (Declaration of Principles and State Policies), Section 9 of the 1973
Constitution, commands that "[t]he State shall afford protection to labor, promote full
employment, ensure equal work opportunities regardless of sex, race or creed, and regulate
the relations between workers and employers. The State shall assure the rights of workers to
self-organization, collective bargaining, security of tenure, and just and humane conditions
of work. The State may provide for compulsory arbitration." The elevation of this provision in
the Declaration of Principles and State Policies of the 1973 Constitution underscored its
sublime significance. Hence, in Philippine Apparel Workers Union v. National Labor Relations
Commission, 20 this Court explained that this obligation of the State to the workingman has
repercussions on the stability, if not survival, of the nation itself
More than elusive justice, survival is the daily problem of the worker and his family. The
employer is not faced with such a problem. More often than not, the employer dissipates
part of his income or profit in pleasures of the flesh and gambling aside from luxuries,
fabulous parties and conspicuous consumption. CDHacE

The stability of the economy does not depend on the employer alone, but on government
economic policies concerning productivity in all areas and not only in the clothing or textile
industries. There is not even an intimation that the company is losing. It is the living wage of
the workers which is the basis of a stable economy. If the company cannot pay a living wage,
it has no business operating at the expense of the lives of its workers from the very start.
The preservation of the lives of the citizens is a basic duty of the State, more vital than the
preservation of the profits of the corporation. When the State is engaged in a life-and-death
struggle, like war or rebellion, it is the citizen worker who fights in defense of the State and
for the preservation of the existence of corporations and businesses within its territorial
confines. When the life of the State is threatened from within and without, it is the citizen,
not the corporation or business enterprise, that mans the weapons of war and march into
battle.
To invoke the nebulous term "stable economy" to justify rejection of the claims of the
workers as against the assets of the employer, is to regard human life as more expendable
than corporate capital. There is nothing in the Constitution that expressly guarantees the
viability of business enterprises much less assuring them of profits. 21
Thus, in affirming the reinstatement of an employee, this Court in Philippine Air Lines v.
Philippine Air Lines Employees Association 22 held that
[t]he futility of this appeal becomes even more apparent considering the express provision in
the Constitution already noted, requiring the State to assure workers "security of tenure." It
was not that specific in the 1935 Charter. The mandate was limited to the State affording
"protection to labor, especially to working women and minors . . ." If by virtue of the above,
it would not be legally justifiable to reverse the order of reinstatement, it becomes even
more readily apparent that such a conclusion is even more unwarranted now. To reach it
would be to show lack of fealty to a constitutional command. 23
1987 Constitution
The 1987 Constitution has deepened the roots of social justice and expanded its branches to
include "all phases of national development." 24 An entire article was devoted to Social
Justice and Human Rights 25 which properly includes a full section on labor
LABOR
Sec. 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance
with law. They shall be entitled to security of tenure, humane conditions of work, and a living
wage. They shall also participate in policy and decision-making processes affecting their
rights and benefits as may be provided by law. TICaEc
The State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in settling disputes, including
conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right
of labor to its just share in the fruits of production and the right of enterprises to reasonable
returns on investments, and to expansion and growth.
Then, Article II (Declaration of Principles and State Policies), Section 18 of the 1987
Constitution, provides that "[t]he State affirms labor as a primary social economic force. It

shall protect the rights of workers and promote their welfare." Under Article II (Declaration of
Principles and State Policies), Section 9 of the 1987 Constitution, "[t]he State shall promote a
just and dynamic social order that will ensure the prosperity and independence of the nation
and free the people from poverty through policies that provide adequate social services,
promote full employment, a rising standard of living and an improved quality of life for all."
These provisions protecting labor are not mere beliefs but should be reinforced by
everyone's behavior.
The Labor Code of the Philippines and its Implementing Rules
In 1974, P.D. No. 442, as amended, otherwise known as the Labor Code of the Philippines,
was enacted. There was power in its purpose which was trumpeted in its title to afford
protection to labor, promote employment and human resources development and insure
industrial peace based on social justice. Article 3 of its Preliminary Title under General
Provisions provides
ART. 3. Declaration of basic policy. The State shall afford protection to labor, promote full
employment, ensure equal work opportunities regardless of sex, race or creed, and regulate
the relations between workers and employers. The State shall assure the rights of workers to
self-organization, collective bargaining, security of tenure, and just and humane conditions
of work.
Under Labor Relations (Book Five), Article 211 states
ART. 211.

Declaration of Policy. A. It is the policy of the State:

(a)
To promote and emphasize the primacy of free collective bargaining and
negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling
labor or industrial disputes;
(b)
To promote free trade unionism as an instrument for the enhancement of democracy
and the promotion of social justice and development;
(c)
To foster the free and voluntary organization of a strong and united labor movement;
HAEDCT
(d)
To promote the enlightenment of workers concerning their rights and obligations as
union members and as employees;
(e)
To provide an adequate administrative machinery for the expeditious settlement of
labor or industrial peace;
(f)

To ensure a stable but dynamic and just industrial peace; and

(g)
To ensure the participation of workers in decision and policy-making processes
affecting their rights, duties and welfare.
In May 1980 and then again in March 1989, B.P. Blg. 70 and R.A. No. 6715 were approved,
respectively, "to strengthen the constitutional right of workers", and "to extend protection to
labor." Accordingly, Volkschel Labor Union v. Bureau of Labor Relations, 26 decreed that "[i]n
the implementation and interpretation of the provisions of the Labor Code and its
implementing regulations, the workingman's welfare should be the primordial and
paramount consideration." 27
Two. Courts at all times should give meaning and substance to constitutional postulates in
favor of the workingman. The 1987 Constitution is fraught with provisions protecting the
workingman, e.g., Secs. 9, 10 and 18, Art. II, and Sec. 3, Art XIII, a legacy of the evolution off

rights. These constitutional creeds should not be dwarfed by deeds. A contrary posture
would convert these creeds as "meaningless constitutional patter." 28 The principle of social
justice was not embedded in the fundamental law for demagoguery. It was meant to be a
vital, articulate, compelling principle of public policy. 29 Social justice should be a living
reality and not a mere high level abstraction. 30 Thus, while the Constitution must be read
as a whole, even if we do not invoke its Due Process Clause, the coherent application of the
separate constitutional creeds on social justice and labor is enough to uphold the workers'
constitutional right to work and their consequent right to job security. These substantive
rights are not to be weakened by a diminished procedural right. For in weakening the
procedure, we weaken the substantive right. The importance of the procedure to protect the
exercise of the right to work cannot be overemphasized.
I have always, as I do now, adhered to the constitutional precepts of social justice and
protection to labor. Some years back, in Pepito v. Secretary of Labor, 31 I, as an Assistant
Solicitor General, invoked the argument of constitutional guarantee of security of tenure as
the rationale for the reinstatement of an employee. The argument was sustained by this
Court speaking through Mr. Chief Justice Fernando no less
. . . As set forth in the Comment, considered as the answer, Solicitor General Estelito P.
Mendoza, Assistant Solicitor General Reynato S. Puno and Solicitor Jesus V. Diaz "are of the
opinion that petitioner's reinstatement is in order." Their view follows from pronouncements
of this Tribunal "handed down in consonance with the social justice and protection to labor
provisions of the Constitution."
. . . That point is well-taken. In the latest case in point, Meracap v. International Ceramics
Mfg. Co., Inc., this Court left no doubt that it is committed to the principle of vitalizing "the
constitutional mandate of security of tenure as an aspect of the protection accorded labor."
There should be no reason why there should be a deviation in this litigation especially so
when again, as noted in the Comment, respect for such a mandate has been accorded in
previous opinions. 32
With due respect, we should not now deviate from this doctrine. TaDSHC
Three. The constitution puts the employee on equal footing with his employer. 33 As
between an employee, usually poor and unlettered, and the employer, who has resources to
secure able legal advice, the law has reason to demand from the latter stricter compliance.
For, social justice in these cases is not equality but protection. 34 As Mr. Chief Justice
Fernando stressed in Victorias Milling Co., Inc. v. Workmen's Compensation Commission 35

To repeat, courts should ever be on the alert lest through inadvertence or faulty analysis the
expected opposition from management be appraised much more favorably than warranted.
The unfortunate result would be that both the social justice concept and the complementary
constitutional command of protection to labor would be disregarded and set at naught.
There is no higher duty cast on the judiciary than to guard against such an undesirable
possibility, fraught as it is with consequences truly to be deplored. 36
In a similar vein, Mr. Chief Justice Ramon C. Aquino, in his Concurring Opinion in Allied
Investigation Bureau v. Hon. Inciong, 37 opined that "social justice in the case of the laborers
means compassionate justice or an implementation of the policy that those who have less in
life should have more in law." 38 The Constitution helps labor for a simple reason.
Employees are overmatched in their struggle against their employers. Their playing field is
not level.
Four. This Court has long extended constitutional due process in labor cases involving
private action. Prior to Wenphil, the rule etched in stone is that an employer can validly

dismiss an erring employee only after giving him notice and hearing. Thus, decades ago, this
Court in Batangas Laguna Tayabas Bus Co. v. Court of Appeals 39 ruled that "the failure of
petitioner to give the private respondent the benefit of a hearing before he was dismissed
constitutes an infringement on his constitutional right to due process of law." 40 In De Leon
v. National Labor Relations Commission 41 where an employee was dismissed without
notice, it was held that "[t]here is in this case a clear denial of due process, a constitutional
right which must be safeguarded at all times especially when what is at stake is petitioner's
position as his only means of livelihood." 42 In Reyes v. Philippine Duplicators, Inc., 43 where
petitioner Reyes was dismissed from the service in 1977 without any investigation or
hearing, this Court found that the dismissal was arbitrary as Reyes was denied due process.
Hence, even the non-compliance with Sections 2 and 3, Rule XIV, Book V of the
Implementing Rules and Regulations of the Labor Code pursuant to the amendments of P.D.
No. 850 which was issued in 1975, requiring a prior clearance from the Department of Labor
to terminate the services of an employee, rendered the termination illegal and nullified the
dismissal of the employee. 44
In August 1981, B.P. Blg. 130 did away with the clearance to terminate employment. Prior
notice and formal investigation were however instead imposed as conditions sine qua non
before termination may be effected. 45 Thus, the inviolability of prior notice and hearing
before an employee could be dismissed was iterated and reiterated. In Miguel v. National
Labor Relations Commission, 46 where the employee was simply handed his walking papers
without any explanation, this Court held that the dismissal was unwarranted and ruled that
"[t]he due process requirement is not a mere formality that may be dispensed with at will.
Its disregard is a matter of serious concern since it constitutes a safeguard of the highest
order in response to man's innate sense of justice." 47 Kwikway Engineering Works v.
National Labor Relations Commission, 48 explained that "[t]he twin requirements of notice
and hearing constitute essential elements of due process in cases of employee dismissal:
the requirement of notice is intended to inform the employee concerned of the employer's
intent to dismiss and the reason for the proposed dismissal; upon the other hand, the
requirement of hearing affords the employee an opportunity to answer his employer's
charges against him accordingly to defend himself therefrom before dismissal is effected.
Neither of these two requirements can be dispensed with without running afoul of the due
process requirement of the 1987 Constitution." 49 In a stream of ceaseless cases, we
adhered to the doctrine that failure to comply with the two-notice rule makes the dismissal
illegal and reinstatement or payment of separation pay in order. 50 In fine, "fire the
employee, and let him explain later" violates this hallowed rules. 51 It has always been this
way until Wenphil. cDTACE
This is not to hold that a trial-type proceeding is required to be conducted by employers. 52
Hearings before the employers prior to the dismissal are in the nature of and akin to
administrative due process which is free from the rigidity of certain procedural requirements.
Mr. Justice Laurel way back in 1940 enumerated the cardinal rights of parties in
administrative proceedings in the landmark case of Ang Tibay v. Court of Industrial Relations
53
1.
the right to a hearing which includes the right to present one's case and submit
evidence in support thereof;
2.

the tribunal must consider the evidence presented;

3.

the decision must have something to support itself;

4.
the evidence must be substantial which means such evidence as a reasonable mind
might accept as adequate to support a conclusion;

5.
the decision must be based on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected;
6.
the tribunal or body or any of its judges must act on its own independent
consideration of the law and facts of the controversy, and not simply accept the views of a
subordinate;
7.
the board or body should, in all controversial questions, render its decision in such
manner that the parties to the proceeding can know the issues involved and the reasons for
the decision rendered. 54
The posture that the constitutional due process requirement limits government action alone
and does not apply to private action is already pass. Thus, even in the United States, the
application of due process to private conduct has gained approval and has become a settled
norm. For, as expressed by Professor Laurence H. Tribe, a noted constitutionalist
But particularly where ostensibly "private" power is the primary source of the coercion and
violence that oppressed individuals and groups experience, it is hard to accept with
equanimity a rigid legal distinction between state and society. The pervasive system of racial
apartheid which existed in the South for a century after the Civil War, for example, thrived
only because of the resonance of society and politics . . . the close fit between private terror,
public discrimination, and political exclusion. So too, where it is the state's persistent
inaction in the face of patterns of deprivation for which the state and society seem to many
to bear collective responsibility, the premise that only identifiable state "action" may be
called constitutional account is deeply troubling. 55
Accordingly, modern notions of violations of due process which may fairly be attributed to
the State have expanded considerably in recent decades. Seemingly private conducts have
arguably been treated as adequate state actions. 56 Individual invasions of individual rights
in certain instances have become proper subjects of constitutional restraints. 57 In fine, as
Mr. Justice Felix Frankfurter put it in Joint Anti-Fascist Refugee Committee v. McGrath, 58
"'[d]ue process,' unlike some legal rules, is not a technical conception with a fixed content
unrelated to time, place, and circumstances . . . Due process is not a mechanical instrument.
It is not a yardstick. It is a delicate process of adjustment inescapably involving the exercise
of judgment by those whom the Constitution entrusted with the unfolding of the process." 59
Beyond argument, the Constitution was designed to embody and celebrate values and to
inculcate proper acceptance of them, as much as to compel governments to abide by them.
60
This is as it ought to be for as well observed by Dr. David C. Korten, Founder and President of
the People Centered Development Forum, ". . . [c]orporations have emerged as the
dominant governance institutions on the planet, with the largest among them reaching into
virtually every country of the world and exceeding most governments in size and power.
Increasingly, it is the corporate interest more than the human interest that defines the policy
agendas of states and international bodies . . ."61 Assailing the threat to liberty coming from
these new economic rulers, President Franklin Delano Roosevelt said: "The royalists of the
economic order have conceded that political freedom was the business of government but
they have maintained that economic slavery was nobody's business. They granted that the
government could protect the citizen in his right to vote, but they denied that the
government could do anything to protect the citizen in his right to work and his right to live."
62 To be sure, some of the unlamented decisions of the Supreme Court of the United States
were those which allowed private corporations to rim roughshod over the rights of workers.
Observed Korten again: 63
A conservative court system that was consistently responsive to the appeals and arguments
of corporate lawyers steadily chipped away at the restraints a wary citizenry had carefully

placed on corporate powers. Step-by-step, the court system put in place new precedents
that made the protection of corporations and corporate property a centerpiece of
constitutional law. These precedents eliminated the use of juries to decide fault and assess
damages in cases involving corporate-caused harm and took away the right of states to
oversee corporate rates of return and prices. Judges sympathetic to corporate interests ruled
that workers were responsible for causing their own injuries on the job, limited the liability of
corporations for damages they might cause, and declared wage and hours laws
unconstitutional. They interpreted the common good to mean maximum production no
matter what was produced or who it harmed. TDcHCa
The choice that confronts us is which right to uphold: the right to work of an underprivileged
natural person or the right to property of an overprivileged artificial person. In truth, there is
but one choice to make for it is highly anomalous to bestow better rights to an artificial
person than a natural person. 64
Certainly, these are neither "novel legal ideas" nor "nouvelle vague theories" but careful
directions brought about by the evolution of laws and the due process clause which saw the
need to rightfully protect the underprivileged as a result of ominous occurrences over the
years.. These, on the contrary, are persuasive axioms which prevail in other countries and
should find application in our jurisdiction.
Indeed, it strains my imagination to see how the application of the constitutional due
process clause to cases of illegal dismissal can "open the floodgates to, and the docket . . .
swamped with, litigations of the scurrilous sort" and "give rise to all absurd constitutional
claims." Suffice it to say that equating an excommunicated Catholic demanding
reinstatement, or a celebrity endorser suing to be able to sing for another brand, or even an
employee preventing his employer to read his out going e-mail with a dismissed employee
exerting his constitutional right to security of tenure and due process of clause is too off-line.
Withal, as adverted to, we have long extended constitutional due process and security of
tenure in labor cases involving private action and I have yet to see "litigations of the
scurrilous sort" being entertained by the courts.
Five. An employee who is denied procedural due process is entitled to reinstatement.
Nothing less. This Court, in carrying out the constitutional directive of the 1973 Constitution
requiring the State to "assure the rights of workers to . . . security of tenure . . ." 65 has
quite consistently nullified, simply on constitutional grounds, dismissals in violation of
procedural due process, notwithstanding the absence of an express provision of any statute.
The Court has done the same under the 1987 Constitution which admittedly has given more
protection to labor than any of our previous charters through a four-paragraph section in
the Article on Social Justice and Human Rights which details the protective mantle accorded
to labor alone. 66 Thus, Art. XIII, Sec. 3 of the 1987 Constitution decrees that "[t]he State
shall afford full protection to labor . . . and promote full employment . . . (All workers) shall
be entitled to security of tenure . . ." Art. XII, Sec. 18 of the 1987 Constitution mandates that
"[t]he State affirms labor as a primary social economic force. It shall protect the rights of
workers and promote their welfare." All told, this Court for almost three decades has set
aside, on constitutional grounds, dismissals in violation of procedural due process until
Wenphil came along, with the interests of the employer tailing and suddenly enjoying
preference. To uphold Wenphil, Serrano, and now Agabon, is to dilute the protection to those
who need it most despite the constitutional mandate which in the language of Mr. Justice
Cardozo speaks with "a reverberating clang that drowns all weaker sounds." With due
respect, the grant of indemnity to the dismissed employee "as both penalty and
disincentive" as the majority provides in the instant case does not square with the protection
accorded by the Constitution to labor. There is only one main relief in cases of dismissal
without notice and hearing reinstatement. cSATEH

Six. Compliance with procedural due process is not a burden on employers. There is no valid
reason why employers should have any difficulty according procedural due process to their
employees. The rules are fairly simple. Section 2, Rule XXIII (Termination of Employment),
Book V (Labor Relations), Omnibus Rules Implementing the Labor Code, provides
Section 2.
Standards of due process; requirements of notice. In all cases of
termination of employment, the following standards of due process shall be substantially
observed:
I.
For termination of employment based on just causes as defined in Article 282 of the
Code:
(a)
A written notice served on the employee specifying the ground or grounds for
termination, and giving to said employee reasonable opportunity within which to explain his
side;
(b)
A hearing or conference during which the employee concerned, with the assistance of
counsel if the employee so desires, is given opportunity to respond to the charge, present
his evidence or rebut the evidence presented against him; and
(c)
A written notice [of] termination served on the employee indicating that upon due
consideration of all the circumstances, grounds have been established to justify his
termination.
In case of termination, the foregoing notices shall be served on the 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.
III.
If the termination is brought about by the completion of the contract or phase
thereof, no prior notice is required. If the termination is brought about by the failure of an
employee to meet the standards of the employer in the case of probationary employment, it
shall be sufficient that a written notice is served the employee within a reasonable time from
the effective date of termination.
Similarly, Section 2, Rule I (Termination of Employment and Retirement), Book VI (PostEmployment) of the same Omnibus Rules, which covers all establishments and
undertakings, whether for profit or not, except the Government, requires the same notice
and hearing.
In sum, in cases of dismissal based on just causes (Article 282, Labor Code), the employer
must give two (2) simple notices: (1) notice before dismissal to apprise the employee being
dismissed of the particular acts or omissions for which the dismissal is sought, and (2)
subsequent notice to inform him of the employer's decision to dismiss him. In cases of
dismissal for authorized causes (Article 283, Labor Code), the employer must serve an
uncomplicated written notice on the worker and on the Department of Labor and
Employment at least one (1) month before the intended closure of the establishment or
reduction of personnel. The law requires nothing more. cEAaIS
It is distressing to say the least why employers should be exempted from observing this
simple duty. In fine, to give to labor what is due them is far from authorizing oppression nor
destruction of the employer as some views would have. The employer cannot simply abuse
the conduct of his business to the prejudice of an employee. The persistence in violating the

rights of the workers is the employer's own doing and self-destruction which may be let
alone.
The right of an employer to dismiss an employee differs from and should not be confused
with the manner in which such right is exercised. While the management has certain
privileges, the exercise of such privileges must be made without abuse of discretion, Thus,
Dole Philippines v. National Labor Relations Commission, 67 recognized as a management
prerogative the determination of the need for the phasing out of a department as a labor
and cost saving device. In the same manner, Remereco Garments Manufacturing v. Minister
of Labor and Employment 68 conceded that it is the sole prerogative of management to
dismiss or lay-off an employee. But in these two cases, and in so many other cases, this
Court cautioned that the exercise of such prerogatives must be made without abuse of
discretion for what is at stake is not only the employee's position but also their means of
livelihood. 69 It must not be oppressive and abusive since it affects one's person and
property. It is the right of every workingman to assure himself and his family a life worthy of
human dignity. Consequently, in dismissing an employee based on authorized cause or for
just cause, as the case may be, the employer must, at the very minimum, comply with
procedural due process. Failure to observe due process, particularly the prior notice
requirement, rightly deserves stiff sanctions, if not condemnation, and not a mere slap on
the wrist, as the majority now propounds. As I said in Serrano
It is equally puzzling why the majority believes that restoring the employee's right to predismissal 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.
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In fine, if the employer's right to dismiss an employee is forfeited for his was failure to
comply with this simple, reasonable duty to pre-notify his employee, he has nothing to
blame but himself. 70
Verily, dismissal without due process debases human dignity. It is, therefore, incumbent
upon the employer to conduct a formal investigation and inform the employee of the specific
charges against him. Most certainly, the resolution of extreme cases, e.g., where the
employee threatens the life of the employer, are the exceptions rather than the ordinary and
usual cases. As such, rules governing them should not be used as the general rule. Rather,
employers should be reminded that under our system of government, even the most
hardened criminals are given their day in court. 71 Employees are not entitled to anything
less. cESDCa
Seven. In the hierarchy of rights of an employees, the right to security of tenure is high, if
not the highest. Its paramount value is recognized and guaranteed under our new
Constitution. 72 Consequently, the first paragraph of Article XIII, Section 3 of the 1987
Constitution, extends the protective mantle of the Constitution to all of labor including the
promotion of full employment. The second paragraph specifies the guaranteed right to
security of tenure. All other rights, e.g., the right to collective bargaining and negotiations,
the right to peaceful concerted activities, the right to strike and form unions, and the right to
due process, merely complement the right to job security. All these complementary rights
are meaningless to an unemployed Juan De la Cruz. Thus, we held in Rance v. National Labor
Relations Commission, 73 "[i]t is the policy of the State to assure the right of workers to
'security of tenure.' The guarantee is an act of social justice. When a person has no property,
his job may possibly be his only possession or means of livelihood, Therefore he should be

protected against any arbitrary deprivation of his job." 74 Almira v. B.F. Goodrich Philippines,
Inc. 75 is worth quoting
It would imply at the very least that where a penalty less punitive would suffice, whatever
missteps may be committed by labor ought not to be visited with a consequence so severe.
It is not only because of the law's concern for the workingman. There is, in addition, his
family to consider. Unemployment brings untold hardships and sorrows on those dependent
on the wage-earner. The misery and pain attendant on the loss of jobs then could be avoided
if there be acceptance of the view that under all the circumstances of this case, petitioners
should not be deprived of their means of livelihood. Nor is this to condone what had been
done by them. For all this while, since private respondent considered them separated from
the service, they had not been paid. From the strictly juridical standpoint, it cannot be too
strongly stressed, to follow Davis in his masterly work, Discretionary Justice, that where a
decision may be made to rest [on] an informed judgment rather than rigid rules, all the
equities of the case must be accorded their due weight. Finally, labor law determinations, to
quote from Bultmann, should be not only secundum rationem but also secundum caritatem.
76
Eight. Workers need work more than anything else. For a wageworker, a job is important.
While there is work, there is food on the table. Take away work, replace it with a meager
lump sum, and the food will disappear. Through work, the breadwinner satisfies his basic
needs and those of his family. He also provides himself with a means to express himself,
transform, develop and perfect his skills and talents. Through work, he interacts and
establishes relations with others. Work is a defining feature of human existence. It is the
means of sustaining life and meeting essential needs. It is also an activity through which
individuals affirm their own identity, both to themselves and to those around them. It is
crucial to individual choice, to the welfare of families and to the stability of societies. 77
Every man has the right to work, to a chance to develop his qualities and his personality in
the exercise of his profession, to equitable remuneration which will enable him and his
family to lead a worthy life on material, social, cultural and spiritual level. 78 Shylock said it
well: "You take my life when you do take the means whereby I live." 79
Nine. To simply allow payment of nominal damages for violation of employee's right to due
process is to give undue advantage to employers. One does not need to have a
stratospheric mind to know that the Constitution gave greater rights to employees over their
employers. The intent is to equalize the fight of the underprivileged against the
overprivileged. We cannot allow the employers to marginalize the right of the workingman to
due process for a few pesos without mocking the protection accorded by the Constitution to
the powerless. The deprivation of the right to security of tenure and due process is beyond
monetary valuation. In fine, to lengthen the longevity of Serrano is to sharpen the dangerous
divide between the haves and have-nots in our society. But Agabon is not merely extending
Serrano. Agabon is far worse than Serrano. TDaAHS
In Serrano, the dismissed employee was awarded backwages from the time his employment
was terminated until it was determined that the termination was for an authorized cause.
Using the facts of the instant case as an illustration, petitioner-employees who were
dismissed in February 1999 stand to get roughly 63 months of backwages under Serrano,
i.e., the number of months from the time they were dismissed in February 1999 until
November 2004 when it was determined that the termination was for just cause. In Agabon,
however, the dismissed employee is merely being granted an indemnity equivalent to Thirty
Thousand Pesos. This is exactly Wenphil more than a decade later, with the cost of money
and inflation factored in. Indeed, the sorry plight of the workers has just been worsened, if
not preserved, by the new majority ruling.
Just a word more. In Serrano, I pointed out:

. . . The dilution of the rule has been abased 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 pre-dismissal notice is
difficult to understand. It is the linchpin of an employees right against an illegal dismissal.
The notice tells him the cause of [the] dismissal. It gives him a better chance to contest his
dismissal in an appropriate proceeding as laid down in the parties' collective bargaining
agreement or the rules of employment established by the employer, as the case may be. In
addition, it gives to both the employee and employer more cooling time to settle their
differences amicably. In fine, the prior notice requirement and the hearing before the
employer gives an employee a distinct, different and effective first level of remedy to protect
his job.
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I respectfully submit that the majority cannot revise our laws nor shun the social justice
thrust of our Constitution in the guise of interpretation especially when its result is to favor
employers and disfavor employees. The majority talks of high nobility but the highest
nobility is to stoop down to reach the poor. 80
In these times when our lowly workers can hardly maintain body and soul together due to
their meager means, I find it hard to believe that the majority in Wenphil, in Serrano, and
now in the instant case Agabon, persists in weakening our employee's right to job security.
The stance simply offends a basic principle of justice so entrenched in our tradition and
etched in our conscience. An employee may not have a torrens title to his job but it is not
too much to require that before he is dismissed by his employer, he should be given a
simple notice of the cause of his dismissal and a summary hearing to present his side. All
our constitutional and statutory precepts on social justice and the protection of labor will go
to naught if we perpetuate our ruling that a dismissal without the required prior notice is
valid and if we just penalize with the payment of pennies violations of the employee's right
to due process. Without doubt, Wenphil and Serrano have lengthened the queue of the
unemployed. Agabon will stretch it out even more. AEIDTc
In the case at bar, where petitioners Jenny Agabon and Virgilio Agabon were dismissed from
the service for abandonment of work without the due process requirements of two (2)
notices and hearing, I submit that the dismissals should be nullified and set aside, and
petitioners immediately reinstated without loss of seniority rights and other privileges. This
Court should protect labor and it should walk the talk.
Accordingly, I vote for the immediate REINSTATEMENT of petitioners Jenny M. Agabon and
Virgilio C. Agabon, without loss of their seniority rights and other privileges and with full
backwages, and the REVERSION to the pre-Wenphil Doctrine in resolving future labor cases.
PANGANIBAN, J ., dissenting:
The core issue of the present case concerns the legal effect of and the corresponding
sanction for the failure of an employer to give an employee the pre-dismissal written notice
of termination and opportunity to be heard required under the Labor Code and its
implementing Rules.

In Serrano v. NLRC, 1 the Court held that such termination of employment should be
considered "ineffectual" and, as such, sanctioned with payment of full back wages plus in
case the dismissal was for an authorized cause separation pay in accordance with Article
283 2 of the Labor Code. In addition, nominal and moral damages may also be awarded, if
warranted by the evidence.
In the case before us now, the employment of petitioners was terminated on the ground of
abandonment of their work. However, the employer failed to accord them their right to prior
notice and hearing, required under Article 277 3 of the Labor Code and Section 2 4 of Rule
XXIII of the 1999 Implementing Rules and Regulations. The majority holds that for violation
of the employee's right to statutory due process, an indemnity in the amount of P30,000
should be awarded to the petitioners as nominal damages under the Civil Code. According to
the majority, this award should serve to discourage employers from violating the statutory
due process rights of their employees.
With due respect, I disagree with this ruling, because it aggravates the rights of our work
force, and diminishes respect for due process.
Jurisprudence on Right to
Notice and Hearing
Prior to the promulgation in 1989 of Wenphil v. NLRC, 5 the Court held that whether for a
valid cause or not dismissing employees without giving them prior notice and the
opportunity to be heard was illegal; and that, as a consequence, they were entitled to
reinstatement plus full back wages. Wenphil abandoned this policy and ruled that if the
dismissal was for a just or an authorized cause, but without due process, the termination
was valid; but that the employer should be sanctioned, for violating the employee's right to
notice and hearing, through the payment of indemnity to each dismissed employee in an
amount ranging from P1,000 to P10,000. DHSEcI
In 2000, Serrano 6 held that such dismissals for just or authorized causes but without due
process were merely ineffectual (not illegal). Nevertheless, the employee was entitled to full
back wages plus nominal and moral damages, if warranted by the evidence; and, in case the
dismissal was for an authorized cause, separation pay in accordance with Article 283 of the
Labor Code.
This time, in the present case, the majority is incredibly reverting to Wenphil in upholding
the validity of employment terminations without due process.
A Setback on
Labor's Rights
With due respect, I strongly oppose the Court's inexplicable turnaround. This ruling is a
setback on labor's rights. Thus, I reiterate my Dissent 7 in Serrano. In that case, I was
grateful enough that the Court had decided to reexamine and modify the ten-year Wenphil
doctrine. In the process, it had at least increased the monetary award that should go to the
dismissed employee from a nominal sum in the concept of "indemnity or damages" to
"full back wages."
I respectfully submit that nothing has transpired in the past four and a half years since
Serrano was issued, that justifies further diminution of whatever constitutional rights to due
process and security of tenure our workers still enjoy. On the contrary, nothing is more
evident than the inescapable fact that their empowerment makes them better partners in
the country's development and global competence. Any further trampling of their rights is
undeserved.

As explained in my Dissenting Opinion in Serrano, the notice requirement finds basis not
only in the Labor Code but, more important, in the due process clause of the Constitution.
Consequently, when an employee is dismissed without due process, the legal effect is an
illegal dismissal; and the appropriate sanction is full back wages plus reinstatement, not
merely full back wages (or separation pay), much less merely "indemnity of one month
salary for every year of service." It is jurisprudentially settled that when procedural due
process is violated, the proceedings in this case, the dismissal shall be voided, and the
parties returned to their status quo ante; that is, the employees should be given back their
old jobs and paid all benefits as if they have never been dismissed.
In ruling that the dismissal should be deemed legal, the majority has virtually rendered
nugatory the employees' right to due process as mandated by law and the Constitution. It
has implicitly allowed the employer simply to ignore such right and just pay the employee.
I respectfully submit that illegal dismissal results not only from the absence of a legal cause,
in accordance with Articles 282 8 to 284 9 of the Labor Code, but likewise from the failure to
observe due process. There are many labor and other cases in which acts violative of due
process have unequivocally been declared illegal by the Court. They range from similar
cases of employment termination 10 to criminal prosecutions 11 to administrative cases 12
and election cases 13 as well. I made a summary of these Decisions in my aforesaid Serrano
Opinion, which I shall no longer repeat here. IcCDAS
Violation of Due Process
Amounts to Illegality of Proceedings
In all these cases, the Court has uniformly ruled that the denial of the fundamental right to
due process resulted in the illegality of the proceedings. Thus, the deprived individuals
should be brought back to their status quo ante, not merely awarded nominal damages or
indemnity.
Our labor force deserves no less. Indeed, the State recognizes it as its primary social
economic force, 14 to which it is constitutionally mandated to afford full protection. 15 Yet,
the Court refuses to declare the illegality of dismissals made without due process. I insist
that we should denounce such dismissals as null and void and grant our workers these
proper reliefs: (1) a declaration that the termination or dismissal is illegal and
unconstitutional; and (2) the reinstatement of the employee, without loss of seniority rights
and accruing benefits plus full back wages.
Exception to Due
Process Sanctions
The only exception to the above sanctions would be a case analogous to Wenphil, one
clearly showing the impracticality and the futility of observing the procedure laid down by
law in terminating employment. To recall, the employee involved in Wenphil had exhibited a
violent temper and caused trouble even in the presence of the restaurant's customers. 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. Under the circumstances, instant 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, towards whom courtesy was a prized virtue.
In most of the succeeding cases, though including the present one before us in which
petitioners had been dismissed without prior notice and hearing there were ample

opportunities for the employers to observe the requisites of due process. There were no
exigencies that called for immediate response.
For the infringement of the fundamental right to due process, I believe that the price the
Court once again sets is too insignificant and too niggardly at such a late hour. I iterate that
imposing a stiffer sanction is the only way to emphasize to employers the extreme
importance of the right to due process. Such right is too sacred to be taken for granted or
glossed over in a cavalier fashion. To hold otherwise, as by simply imposing an indemnity (or
even "full back wages" as was done in Serrano), is to allow the rich and powerful to virtually
purchase and thereby stifle a constitutional right granted to the poor and marginalized.
TAIEcS
Respect for Due Process
Should be Maintained
The ponencia concedes that the worker's right to due process is both statutory and
constitutional in nature. Yet, it still gives it little regard and value.
May I just recall that in Wallem Maritime Services v. NLRC, 16 the Court said that "[o]ne's
employment, profession, trade or calling is a property right within the protection of the
constitutional guaranty of due process of law." An objective reading of the Bill of Rights
clearly shows that the due process protection is not limited to government action alone. The
Constitution does not say that the right cannot be claimed against private individuals and
entities. Indeed, the employee is entitled to due process, not because of the Labor Code, but
because of the Constitution. Elementary is the doctrine that constitutional provisions are
deemed written into every statute, contract or undertaking.
True, traditional doctrine holds that constitutional rights may be invoked only against the
State, which in the past was the only entity in a position to violate these rights, including the
due process clause. However, with the advent of liberalization, deregulation and
privatization, the State tended to cede some of its powers to the "market forces." Hence,
corporate behemoths and even individuals may now be sources of abuses and threats to
human rights and liberties. I believe, therefore, that this traditional doctrine should be
modified to enable the judiciary to cope with new paradigms and to continue protecting the
people from new forms of abuses.
In the final analysis, what is involved here is not simply the amount of monetary award
whether insignificant or substantial; whether termed as indemnity, penalty, separation pay
or full back wages. Neither is the subject here merely a matter of respect for workers' rights
or adequate protection of labor. The bottom line is the constitutionally granted right to due
process, which is the very essence of justice itself. Where the rule of law is the bedrock of
our free society, justice is its very lifeblood. A denial of due process is thus no less than a
denial of justice itself.
Summary
In conclusion, I believe that even if there was just or authorized cause for termination of
employment, but due process was not afforded the employee, the dismissal proceedings
must be declared null and void. Consequently, the employee must be reinstated and given
full back wages and accruing benefits. Depending on the facts of each case, damages as
provided under applicable articles of the Civil Code may additionally be awarded.
An exception may be entertained if the employer could adequately prove that under the
peculiar circumstances of the case, there was no opportunity to comply with due process
requirements; or doing so would have been impractical or gravely adverse to the employer,
as when the employee was caught in flagrante delicto. Under such circumstances, dismissal

would not be illegal, and no award may properly be granted. Nevertheless, as a measure of
compassion in this specific instance, the employee may be given a nominal sum depending
on the circumstances, pursuant to Article 2221 of the Civil Code. AcaEDC
WHEREFORE, I vote to GRANT the Petition and ORDER the petitioners' REINSTATEMENT
without loss of seniority rights and other privileges, plus FULL BACK WAGES from the date of
termination until actual reinstatement.
TINGA, J.:
I concur in the result, the final disposition of the petition being correct. There is no denying
the importance of the Court's ruling today, which should be considered as definitive as to
the effect of the failure to render the notice and hearing required under the Labor Code
when an employee is being dismissed for just causes, as defined under the same law. The
Court emphatically reaffirms the rule that dismissals for just cause are not invalidated due to
the failure of the employer to observe the proper notice and hearing requirements under the
Labor Code. At the same time, The Decision likewise establishes that the Civil Code
provisions on damages serve as the proper framework for the appropriate relief to the
employee dismissed for just cause if the notice-hearing requirement is not met. Serrano v.
NLRC, 1 insofar as it is controlling in dismissals for unauthorized causes, is no longer the
controlling precedent. Any and all previous rulings and statements of the Court inconsistent
with these determinations are now deemed inoperative.
My views on the questions raised in this petition are comprehensive, if I may so in all
modesty. I offer this opinion to discuss the reasoning behind my conclusions, pertaining as
they do to questions of fundamental importance.
Prologue
The factual backdrop of the present Petition for Review is not novel. Petitioners claim that
they were illegally dismissed by the respondents, who allege in turn that petitioners had
actually abandoned their employment. There is little difficulty in upholding the findings of
the NRLC and the Court of Appeals that petitioners are guilty of abandonment, one of the
just causes for termination under the Labor Code. Yet, the records also show that the
employer was remiss in not giving the notice required by the Labor Code; hence, the
resultant controversy as to the legal effect of such failure vis--vis the warranted dismissal.
Ostensibly, the matter has been settled by our decision in Serrano, 2 wherein the Court
ruled that the failure to properly observe the notice requirement did not render the
dismissal, whether for just or authorized causes, null and void, for such violation was not a
denial of the constitutional right to due process, and that the measure of appropriate
damages in such cases ought to be the amount of wages the employee should have
received were it not for the termination of his employment without prior notice. 3 Still, the
Court has, for good reason, opted to reexamine the so-called Serrano doctrine through the
present petition THSaEC
Antecedent Facts
Respondent Riviera Home Improvements, Inc (Riviera Home) is engaged in the manufacture
and installation of gypsum board and cornice. In January of 1992, the Agabons were hired in
January of 1992 as cornice installers by Riviera Home. According to their personnel file with
Riviera Home, the Agabon given address was 3RDS Tailoring, E. Rodriguez Ave., Moonwalk
Subdivision, P-II Paraaque City, Metro Manila. 4
It is not disputed that sometime around February 1999, the Agabons stopped rendering
services for Riviera Home. The Agabons allege that beginning on 23 February 1999, they
stopped receiving assignments from Riviera Home. 5 When they demanded an explanation,

the manager of Riviera Homes, Marivic Ventura, informed them that they would be hired
again, but on a "pakyaw" (piece-work) basis. When the Agabons spurned this proposal,
Riviera Homes refused to continue their employment under the original terms and
agreement. 6 Taking affront, the Agabons filed a complaint for illegal dismissal with the
National Labor Relations Commission ("NLRC").
Riviera Homes adverts to a different version of events leading to the filing of the complaint
for illegal dismissal. It alleged that in the early quarter of 1999, the Agabons stopped
reporting for work with Riviera. Two separate letters dated 10 March 1999, were sent to the
Agabons at the address indicated in their personnel file. In these notices, the Agabons were
directed to report for work immediately. 7 However, these notices were returned unserved
with the notation "RTS Moved." Then, in June of 1999, Virgilio Agabon informed Riviera
Homes by telephone that he and Jenny Agabon were ready to return to work for Riviera
Homes, on the condition that their wages be first adjusted. On 18 June 1999, the Agabons
went to Riviera Homes, and in a meeting with management, requested a wage increase of
up to Two Hundred Eighty Pesos (P280.00) a day. When no affirmative response was offered
by Riviera Homes, the Agabons initiated the complaint before the NLRC. 8
In their Position Paper, the Agabons likewise alleged that they were required to work even on
holidays and rest days, but were never paid the legal holiday pay or the premium pay for
holiday or rest day. They also asserted that they were denied Service Incentive Leave pay,
and that Virgilio Agabon was not given his thirteenth (13th) month pay for the year 1998. 9
After due deliberation, Labor Arbiter Daisy G. Cauton-Barcelona rendered a Decision dated
28 December 1999, finding the termination of the Agabons illegal, and ordering Riviera
Homes to pay backwages in the sum of Fifty Six Thousand Two Hundred Thirty One Pesos
and Ninety Three Centavos (P56,231.93) each. The Labor Arbiter likewise ordered, in lieu of
reinstatement, the payment of separation pay of one (1) month pay for every year of service
from date of hiring up to 29 November 1999, as well as the payment of holiday pay, service
incentive leave pay, and premium pay for holiday and restday, plus thirteenth (13th) month
differential to Virgilio Agabon. 10
In so ruling, the Labor Arbiter declared that Riviera Homes was unable to satisfactorily refute
the Agabons' claim that they were no longer given work to do after 23 February 1999 and
that their rehiring was only on "pakyaw" basis. The Labor Arbiter also held that Riviera
Homes failed to comply with the notice requirement, noting that Riviera Homes well knew of
the change of address of the Agabons, considering that the identification cards it issued
stated a different address from that on the personnel file. 11 The Labor Arbiter asserted the
principle that in all termination cases, strict compliance by the employer with the demands
of procedural and substantive due process is a condition sine qua non for the same to be
declared valid. 12
On appeal, the NLRC Second Division set aside the Labor Arbiter's Decision and ordered the
dismissal of the complaint for lack of merit. 13 The NLRC held that the Agabons were not
able to refute the assertion that for the payroll period ending on 15 February 1999, Virgilio
and Jenny Agabon worked for only two and one-half (2 1/2) and three (3) days, respectively.
It disputed the earlier finding that Riviera Homes had known of the change in address,
noting that the address indicated in the identification cards was not the Agabons, but that of
the persons who should be notified in case of emergency concerning the employee. 14 Thus,
proper service of the notice was deemed to have been accomplished. Further, the notices
evinced good reason to believe that the Agabons had not been dismissed, but had instead
abandoned their jobs by refusing to report for work. ICDcEA
In support of its conclusion that the Agabons had abandoned their work, the NLRC also
observed that the Agabons did not seek reinstatement, but only separation pay. While the
choice of relief was premised by the Agabons on their purported strained relations with

Riviera Homes, the NLRC pointed out that such claim was amply belied by the fact that the
Agabons had actually sought a conference with Riviera Homes in June of 1999. The NLRC
likewise found that the failure of the Labor Arbiter to justify the award of extraneous money
claims, such as holiday and service incentive leave pay, confirmed that there was no proof
to justify such claims.
A Petition for Certiorari was promptly filed with the Court of Appeals by the Agabons,
imputing grave abuse of discretion on the part of the NLRC in dismissing their complaint for
illegal dismissal. In a Decision 15 dated 23 January 2003, the Court of Appeals affirmed the
finding that the Agabons had abandoned their employment. It noted that the two elements
constituting abandonment had been established, to wit: the failure to report for work or
absence without valid justifiable reason, and; a clear intention to sever the employeremployee relationship. The intent to sever the employer-employee relationship was
buttressed by the Agabon's choice to seek not reinstatement, but separation pay. The Court
of Appeals likewise found that the service of the notices were valid, as the Agabons did not
notify Riviera Homes of their change of address, and thus the failure to return to work
despite notice amounted to abandonment of work.
However, the Court of Appeals reversed the NLRC as regards the denial of the claims for
holiday pay, service incentive leave pay, and the balance of Virgilio Agabon's thirteenth
(13th) month pay. It ruled that the failure to adduce proof in support thereof was not fatal
and that the burden of proving that such benefits had already been paid rested on Riviera
Homes. 16 Given that Riviera Homes failed to present proof of payment to the Agabons of
their holiday pay and service incentive leave pay for the years 1996, 1997 and 1998, the
Court of Appeals chose to believe that such benefits had not actually been received by the
employees. It also ruled that the apparent deductions made by Riviera Homes on the
thirteenth (13th) month pay of Virgilio Agabon violated Section 10 of the Rules and
Regulations Implementing Presidential Decree No. 851. 17 Accordingly, Riviera Homes was
ordered to pay the Agabons holiday pay for four (4) regular holidays in 1996, 1997 and
1998, as well as their service incentive leave pay for said years, and the balance of Virgilio
Agabon's thirteenth (13th) month pay for 1998 in the amount of Two Thousand One Hundred
Fifty Pesos (P2,150.00).18
In their Petition for Review, the Agabons claim that they had been illegally dismissed,
reasserting their version of events, thus: (1) that they had not been given new assignments
since 23 February 1999; (2) that they were told that they would only be re-hired on a
"pakyaw" basis, and; (3) that Riviera Homes had knowingly sent the notices to their old
address despite its knowledge of their change of address as indicated in the identification
cards. 19 Further, the Agabons note that only one notice was sent to each of them, in
violation of the rule that the employer must furnish two written notices before termination
the first to apprise the employee of the cause for which dismissal is sought, and the second
to notify the employee of the decision of dismissal. 20 The Agabons likewise maintain that
they did not seek reinstatement owing to the strained relations between them and Riviera
Homes. TCDcSE
The Agabons present to this Court only one issue, i.e.: whether or not they were illegally
dismissed from their employment. 21 There are several dimensions though to this issue
which warrant full consideration.
The Abandonment Dimension
Review of Factual Finding of Abandonment
As the Decision points out, abandonment is characterized by the failure to report for work or
absence without valid or justifiable reason, and a clear intention to sever the employeremployee relationship. The question of whether or not an employee has abandoned

employment is essentially a factual issue. 22 The NLRC and the Court of Appeals, both
appropriate triers of fact, concluded that the Agabons had actually abandoned their
employment, thus there is little need for deep inquiry into the correctness of this factual
finding. There is no doubt that the Agabons stopped reporting for work sometime in February
of 1999. And there is no evidence to support their assertion that such absence was due to
the deliberate failure of Riviera Homes to give them work. There is also the fact, as noted by
the NLRC and the Court of Appeals, that the Agabons did not pray for reinstatement, but
only for separation pay and money claims. 23 This failure indicates their disinterest in
maintaining the employer-employee relationship and their unabated avowed intent to sever
it. Their excuse that strained relations between them and Riviera Homes rendered
reinstatement no longer feasible was hardly given credence by the NLRC and the Court of
Appeals. 24
The contrary conclusion arrived at by the Labor Arbiter as regards abandonment is of little
bearing to the case. All that the Labor Arbiter said on that point was that Riviera Homes was
not able to refute the Agabons' claim that they were terminated on 23 February 1999. 25
The Labor Arbiter did not explain why or how such finding was reached. Being bereft of
reasoning, the conclusion deserves scant consideration.
Compliance with Notice Requirement
At the same time, both the NLRC and the Court of Appeals failed to consider the apparent
fact that the rules governing notice of termination were not complied with by Riviera Homes.
Section 2, Book V, Rule XXIII of the Omnibus Rules Implementing the Labor Code
(Implementing Rules) specifically provides that for termination of employment based on just
causes as defined in Article 282, there must be: (1) written notice served on the employee
specifying the grounds for termination and giving employee reasonable opportunity to
explain his/her side; (2) a hearing or conference wherein the employee, with the assistance
of counsel if so desired, is given opportunity to respond to the charge, present his evidence
or rebut evidence presented against him/her; and (3) written notice of termination served on
the employee indicating that upon due consideration of all the circumstances, grounds have
been established to justify termination. EICDSA
At the same time, Section 2, Book V, Rule XXIII of the Implementing Rules does not require
strict compliance with the above procedure, but only that the same be "substantially
observed."
Riviera Homes maintains that the letters it sent on 10 March 1999 to the Agabons
sufficiently complied with the notice rule. These identically worded letters noted that the
Agabons had stopped working without permission that they failed to return for work despite
having been repeatedly told to report to the office and resume their employment. 26 The
letters ended with an invitation to the Agabons to report back to the office and return to
work. 27
The apparent purpose of these letters was to advise the Agabons that they were welcome to
return back to work, and not to notify them of the grounds of termination. Still, considering
that only substantial compliance with the notice requirement is required, I am prepared to
say that the letters sufficiently conform to the first notice required under the Implementing
Rules. The purpose of the first notice is to duly inform the employee that a particular
transgression is being considered against him or her, and that an opportunity is being
offered for him or her to respond to the charges. The letters served the purpose of informing
the Agabons of the pending matters beclouding their employment, and extending them the
opportunity to clear the air.
Contrary to the Agabons' claim, the letter-notice was correctly sent to the employee's last
known address, in compliance with the Implementing Rules. There is no dispute that these

letters were not actually received by the Agabons, as they had apparently moved out of the
address indicated therein. Still, the letters were sent to what Riviera Homes knew to be the
Agabons' last known address, as indicated in their personnel file. The Agabons insist that
Riviera Homes had known of the change of address, offering as proof their company IDs
which purportedly print out their correct new address. Yet, as pointed out by the NLRC and
the Court of Appeals, the addresses indicated in the IDs are not the Agabons, but that of the
person who is to be notified in case of emergency involving either or both of the Agabons.
The actual violation of the notice requirement by Riviera Homes lies in its failure to serve on
the Agabons the second notice which should inform them of termination. As the Decision
notes, Riviera Homes' argument that sending the second notice was useless due to the
change of address is inutile, since the Implementing Rules plainly require that the notice of
termination should be served at the employee's last known address.
The importance of sending the notice of termination should not be trivialized. The
termination letter serves as indubitable proof of loss of employment, and its receipt compels
the employee to evaluate his or her next options. Without such notice, the employee may be
left uncertain of his fate; thus, its service is mandated by the Implementing Rules. Noncompliance with the notice rule, as evident in this case, contravenes the Implementing
Rules. But does the violation serve to invalidate the Agabons' dismissal for just cause?
The So-Called Constitutional Law Dimension
Justices Puno and Panganiban opine that the Agabons should be reinstated as a
consequence of the violation of the notice requirement. I respectfully disagree, for the
reasons expounded below. IHCDAS
Constitutional Considerations
Of Due Process and the Notice-Hearing
Requirement in Labor Termination Cases
Justice Puno proposes that the failure to render due notice and hearing prior to dismissal for
just cause constitutes a violation of the constitutional right to due process. This view, as
acknowledged by Justice Puno himself, runs contrary to the Court's pronouncement in
Serrano v. NLRC 28 that the absence of due notice and hearing prior to dismissal, if for just
cause, violates statutory due process.
The ponencia of Justice Vicente V. Mendoza in Serrano provides this cogent overview of the
history of the doctrine:
Indeed, to contend that the notice requirement in the Labor Code is an aspect of due
process is to overlook the fact that Art. 283 had its origin in Art. 302 of the Spanish Code of
Commerce of 1882 which gave either party to the employer-employee relationship the right
to terminate their relationship by giving notice to the other one month in advance. In lieu of
notice, an employee could be laid off by paying him a mesada equivalent to his salary for
one month. This provision was repealed by Art. 2270 of the Civil Code, which took effect on
August 30, 1950. But on June 12, 1954, R.A. No. 1052, otherwise known as the Termination
Pay Law, was enacted reviving the mesada. On June 21, 1957, the law was amended by R.A.
No. 1787 providing for the giving of advance notice for every year of service. 29
Under Section 1 of the Termination Pay Law, an employer could dismiss an employee without
just cause by serving written notice on the employee at least one month in advance or onehalf month for every year of service of the employee, whichever was longer. 30 Failure to
serve such written notice entitled the employee to compensation equivalent to his salaries

or wages corresponding to the required period of notice from the date of termination of his
employment.
However, there was no similar written notice requirement under the Termination Pay Law if
the dismissal of the employee was for just cause. The Court, speaking through Justice JBL
Reyes, ruled in Phil. Refining Co. v. Garcia: 31
[Republic] Act 1052, as amended by Republic Act 1787, impliedly recognizes the right of the
employer to dismiss his employees (hired without definite period) whether for just case, as
therein defined or enumerated, or without it. If there be just cause, the employer is not
required to serve any notice of discharge nor to disburse termination pay to the
employee. . . . 32
Clearly, the Court, prior to the enactment of the Labor Code, was ill-receptive to the notion
that termination for just cause without notice or hearing violated the constitutional right to
due process. Nonetheless, the Court recognized an award of damages as the appropriate
remedy. In Galsim v. PNB, 33 the Court held:
Of course, the employer's prerogative to dismiss employees hired without a definite period
may be with or without cause. But if the manner in which such right is exercised is abusive,
the employer stands to answer to the dismissed employee for damages. 34
The Termination Pay Law was among the repealed laws with the enactment of the Labor
Code in 1974. Significantly, the Labor Code, in its inception, did not require notice or hearing
before an employer could terminate an employee for just cause. As Justice Mendoza
explained:
Where the termination of employment was for a just cause, no notice was required to be
given to the employee. It was only on September 4, 1981 that notice was required to be
given even where the dismissal or termination of an employee was for cause. This was made
in the rules issued by the then Minister of Labor and Employment to implement B.P. Blg. 130
which amended the Labor Code. And it was still much later when the notice requirement was
embodied in the law with the amendment of Art. 277(b) by R.A. No. 6715 on March 2, 1989.
35
It cannot be denied though that the thinking that absence of notice or hearing prior to
termination constituted a constitutional violation has gained a jurisprudential foothold with
the Court. Justice Puno, in his Dissenting Opinion, cites several cases in support of this
theory, beginning with Batangas Laguna Tayabas Bus Co. v. Court of Appeals 36 wherein we
held that "the failure of petitioner to give the private respondent the benefit of a hearing
before he was dismissed constitutes an infringement on his constitutional right to due
process of law. 37
Still, this theory has been refuted, pellucidly and effectively to my mind, by Justice
Mendoza's disquisition in Serrano, thus:
. . . There are three reasons why, on the other hand, violation by the employer of the notice
requirement cannot be considered a denial of due process resulting in the nullity of the
employee's dismissal or layoff.
The first is that the Due Process Clause of the Constitution is a limitation on governmental
powers. It does not apply to the exercise of private power, such as the termination of
employment under the Labor Code. This is plain from the text of Art. III, 1 of the
Constitution, viz.: "No person shall be deprived of life, liberty, or property without due
process of law. . . ." The reason is simple: Only the State has authority to take the life,
liberty, or property of the individual. The purpose of the Due Process Clause is to ensure that
the exercise of this power is consistent with what are considered civilized methods. HDTCSI

The second reason is that notice and hearing are required under the Due Process Clause
before the power of organized society are brought to bear upon the individual. This is
obviously not the case of termination of employment under Art. 283. Here the employee is
not faced with an aspect of the adversary system. The purpose for requiring a 30-day
written notice before an employee is laid off is not to afford him an opportunity to be heard
on any charge against him, for there is none. The purpose rather is to give him time to
prepare for the eventual loss of his job and the DOLE an opportunity to determine whether
economic causes do exist justifying the termination of his employment.
xxx

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The third reason why the notice requirement under Art. 283 can not be considered a
requirement of the Due Process Clause is that the employer cannot really be expected to be
entirely an impartial judge of his own cause. This is also the case in termination of
employment for a just cause under Art. 282 (i.e., serious misconduct or willful disobedience
by the employee of the lawful orders of the employer, gross and habitual neglect of duties,
fraud or willful breach of trust of the employer, commission of crime against the employer or
the latter's immediate family or duly authorized representatives, or other analogous cases).
38
The Court in the landmark case of People v. Marti 39 clarified the proper dimensions of the
Bill of Rights.
That the Bill of Rights embodied in the Constitution is not meant to be invoked against acts
of private individuals finds support in the deliberations of the Constitutional Commission.
True, the liberties guaranteed by the fundamental law of the land must always be subject to
protection. But protection against whom? Commissioner Bernas in his sponsorship speech in
the Bill of Rights answers the query which he himself posed, as follows:
"First, the general reflections. The protection of fundamental liberties in the essence of
constitutional democracy. Protection against whom? Protection against the state. The Bill of
Rights governs the relationship between the individual and the state. Its concern is not the
relation between individuals, between a private individual and other individuals. What the
Bill of Rights does is to declare some forbidden zones in the private sphere inaccessible to
any power holder." (Sponsorship Speech of Commissioner Bernas; Record of the
Constitutional Commission, Vol. 1, p. 674; July 17,1986; Italics supplied) 40
I do not doubt that requiring notice and hearing prior to termination for just cause is an
admirable sentiment borne out of basic equity and fairness. Still, it is not a constitutional
requirement that can impose itself on the relations of private persons and entities. Simply
put, the Bill of Rights affords protection against possible State oppression against its
citizens, but not against an unjust or repressive conduct by a private party towards another.
CDcHSa
Justice Puno characterizes the notion that constitutional due process limits government
action alone as "pass," and adverts to nouvelle vague theories which assert that private
conduct may be restrained by constitutional due process. His dissent alludes to the
American experience making references to the post-Civil War/pre-World War II era when the
US Supreme Court seemed overly solicitous to the rights of big business over those of the
workers.
Theories, no matter how entrancing, remain theoretical unless adopted by legislation, or
more controversially, by judicial opinion. There were a few decisions of the US Supreme
Court that, ostensibly, imposed on private persons the values of the constitutional
guarantees. However, in deciding the cases, the American High Court found it necessary to

link the actors to adequate elements of the "State" since the Fourteenth Amendment plainly
begins with the words "No State shall. . . ." 41
More crucially to the American experience, it had become necessary to pass legislation in
order to compel private persons to observe constitutional values. While the equal protection
clause was deemed sufficient by the Warren Court to bar racial segregation in public
facilities, it necessitated enactment of the Civil Rights Acts of 1964 to prohibit segregation
as enforced by private persons within their property. In this jurisdiction, I have trust in the
statutory regime that governs the correction of private wrongs. There are thousands of
statutes, some penal or regulatory in nature, that are the source of actionable claims against
private persons. There is even no stopping the State, through the legislative cauldron, from
compelling private individuals, under pain of legal sanction, into observing the norms
ordained in the Bill of Rights.
Justice Panganiban's Separate Opinion asserts that corporate behemoths and even
individuals may now be sources of abuses and threats to human rights and liberties. 42 The
concern is not unfounded, but appropriate remedies exist within our statutes, and so resort
to the constitutional trump card is not necessary. Even if we were to engage the premise,
the proper juristic exercise should be to examine whether an employer has taken the
attributes of the State so that it could be compelled by the Constitution to observe the
proscriptions of the Bill of Rights. But the strained analogy simply does not square since the
attributes of an employer are starkly incongruous with those of the State. Employers plainly
do not possess the awesome powers and the tremendous resources which the State has at
its command.
The differences between the State and employers are not merely literal, but extend to their
very essences. Unlike the State, the raison d'etre of employers in business is to accumulate
profits. Perhaps the State and the employer are similarly capacitated to inflict injury or
discomfort on persons under their control, but the same power is also possessed by a school
principal, hospital administrator, or a religious leader, among many others. Indeed, the
scope and reach of authority of an employer pales in comparison with that of the State.
There is no basis to conclude that an employer, or even the employer class, may be deemed
a de facto state and on that premise, compelled to observe the Bill of Rights. There is simply
no nexus in their functions, distaff as they are, that renders it necessary to accord the same
jurisprudential treatment. HACaSc
It may be so, as alluded in the dissent of Justice Puno, that a conservative court system
overly solicitous to the concerns of business may consciously gut away at rights or privileges
owing to the labor sector. This certainly happened before in the United States in the early
part of the twentieth century, when the progressive labor legislation such as that enacted
during President Roosevelt's New Deal regime most of them addressing problems of labor
were struck down by an arch-conservative Court. 43 The preferred rationale then was to
enshrine within the constitutional order business prerogatives, rendering them superior to
the express legislative intent. Curiously, following its judicial philosophy at the time the U.S.
Supreme Court made due process guarantee towards employers prevail over the police
power to defeat the cause of labor. 44
Of course, this Court should not be insensate to the means and methods by which the
entrenched powerful class may maneuver the socio-political system to ensure selfpreservation. However, the remedy to rightward judicial bias is not leftward judicial bias. The
more proper judicial attitude is to give due respect to legislative prerogatives, regardless of
the ideological sauce they are dipped in.
While the Bill of Rights maintains a position of primacy in the constitutional hierarchy, 45 it
has scope and limitations that must be respected and asserted by the Court, even though
they may at times serve somewhat bitter ends. The dissenting opinions are palpably

distressed at the effect of the Decision, which will undoubtedly provoke those reflexively
sympathetic to the labor class. But haphazard legal theory cannot be used to justify the
obverse result. The adoption of the dissenting views would give rise to all sorts of absurd
constitutional claims. An excommunicated Catholic might demand his/her reinstatement into
the good graces of the Church and into communion on the ground that excommunication
was violative of the constitutional right to due process. A celebrity contracted to endorse
Pepsi Cola might sue in court to void a stipulation that prevents him/her from singing the
praises of Coca Cola once in a while, on the ground that such stipulation violates the
constitutional right to free speech. An employee might sue to prevent the employer from
reading outgoing e-mail sent through the company server using the company e-mail
address, on the ground that the constitutional right to privacy of communication would be
breached.
The above concerns do not in anyway serve to trivialize the interests of labor. But we must
avoid overarching declarations in order to justify an end result beneficial to labor. I dread the
doctrinal acceptance of the notion that the Bill of Rights, on its own, affords protection and
sanctuary not just from the acts of State but also from the conduct of private persons.
Natural and juridical persons would hesitate to interact for fear that a misstep could lead to
their being charged in court as a constitutional violator. Private institutions that thrive on
their exclusivity, such as churches or cliquish groups, could be forced to renege on their
traditional tenets, including vows of secrecy and the like, if deemed by the Court as
inconsistent with the Bill of Rights. Indeed, that fundamental right of all private persons to
be let alone would be forever diminished because of a questionable notion that contravenes
with centuries of political thought. aDcETC
It is not difficult to be enraptured by novel legal ideas. Their characterization is susceptible
to the same marketing traps that hook consumers to new products. With the help of unique
wrapping, a catchy label, and testimonials from professed experts from exotic lands, a
malodorous idea may gain wide acceptance, even among those self-possessed with their
own heightened senses of perception. Yet before we join the mad rush in order to proclaim a
theory as "brilliant," a rigorous test must first be employed to determine whether it
complements or contradicts our own system of laws and juristic thought. Without such
analysis, we run the risk of abnegating the doctrines we have fostered for decades and the
protections they may have implanted into our way of life.
Should the Court adopt the view that the Bill of Rights may be invoked to invalidate actions
by private entities against private individuals, the Court would open the floodgates to, and
the docket would be swamped with, litigations of the scurrilous sort. Just as patriotism is the
last refuge of scoundrels, the broad constitutional claim is the final resort of the desperate
litigant.
Constitutional Protection of Labor
The provisions of the 1987 Constitution affirm the primacy of labor and advocate a multifaceted state policy that affords, among others, full protection to labor. Section 18, Article II
thereof provides:
The State affirms labor as a primary social economic force. It shall protect the rights of
workers and promote their welfare.
Further, Section 3, Article XIII states:
The State shall afford full protection to labor, local and overseas, organized and unorganized,
and promote full employment and equal employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance
with law. They shall be entitled to security to tenure, humane conditions of work, and a living
wage. They shall also participate in policy and decision-making processes affecting their
rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in settling disputes, including
conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right
of labor to its just share in the fruits of production and the right of enterprises to reasonable
returns on investments, and to expansion and growth. DCcHIS
The constitutional enshrinement of the guarantee of full protection of labor is not novel to
the 1987 Constitution. Section 6, Article XIV of the 1935 Constitution reads:
The State shall afford protection to labor, especially to working women, and minors, and
shall regulate the relations between the landowner and tenant, and between labor and
capital in industry and in agriculture. The State may provide for compulsory arbitration.
Similarly, among the principles and state policies declared in the 1973 Constitution, is that
provided in Section 9, Article II thereof:
The State shall afford full protection to labor, promote full employment and equality in
employment, ensure equal work opportunities regardless of sex, race or creed, and regulate
the relations between workers and employers. The State shall assure the rights of workers to
self-organization, collective bargaining, security of tenure, and just and humane conditions
of work. The State may provide for compulsory arbitration.
On the other hand, prior to the 1973 Constitution, the right to security of tenure could only
be found in legislative enactments and their respective implementing rules and regulations.
It was only in the 1973 Constitution that security of tenure was elevated as a constitutional
right. The development of the concept of security of tenure as a constitutionally recognized
right was discussed by this Court in BPI Credit Corporation v. NLRC, 46 to wit:
The enthronement of the worker's right to security or tenure in our fundamental law was not
achieved overnight. For all its liberality towards labor, our 1935 Constitution did not elevate
the right as a constitutional right. For a long time, the worker's security of tenure had only
the protective mantle of statutes and their interpretative rules and regulations. It was an
uncertain protection that sometimes yielded to the political permutations of the times. It
took labor nearly four decades of sweat and tears to persuade our people thru their leaders,
to exalt the worker's right to security of tenure as a sacrosanct constitutional right. It was
Article II, section 2 [9] of our 1973 Constitution that declared as a policy that the State shall
assure the right of workers to security tenure. The 1987 Constitution is even more solicitous
of the welfare of labor. Section 3 of its Article XIII mandates that the State shall afford full
protection to labor and declares that all workers shall be entitled to security of tenure.
Among the enunciated State policies are the promotion of social justice and a just and
dynamic social order. In contrast, the prerogative of management to dismiss a worker, as an
aspect of property right, has never been endowed with a constitutional status.
The unequivocal constitutional declaration that all workers shall be entitled to security of
tenure spurred our lawmakers to strengthen the protective walls around this hard earned
right. The right was protected from undue infringement both by our substantive and
procedural laws. Thus, the causes for dismissing employees were more defined and
restricted; on the other hand, the procedure of termination was also more clearly delineated.

These substantive and procedural laws must be strictly complied with before a worker can
be dismissed from his employment. 47
It is quite apparent that the constitutional protection of labor was entrenched more than
eight decades ago, yet such did not prevent this Court in the past from affirming dismissals
for just cause without valid notice. Nor was there any pretense made that this constitutional
maxim afforded a laborer a positive right against dismissal for just cause on the ground of
lack of valid prior notice. As demonstrated earlier, it was only after the enactment of the
Labor Code that the doctrine relied upon by the dissenting opinions became en vogue. This
point highlights my position that the violation of the notice requirement has statutory
moorings, not constitutional. DSTCIa
It should be also noted that the 1987 Constitution also recognizes the principle of shared
responsibility between workers and employers, and the right of enterprise to reasonable
returns, expansion, and growth. Whatever perceived imbalance there might have been
under previous incarnations of the provision have been obviated by Section 3, Article XIII.
In the case of Manila Prince Hotel v. GSIS, 48 we affirmed the presumption that all
constitutional provisions are self-executing. We reasoned that to declare otherwise would
result in the pernicious situation wherein by mere inaction and disregard by the legislature,
constitutional mandates would be rendered ineffectual. Thus, we held:
As against constitutions of the past, modern constitutions have been generally based upon a
different principle and have often become in effect extensive codes of laws intended to
operate directly upon the people in a manner similar to that of statutory enactments, and
the function of constitutional conventions has evolved into one more like that of a legislative
body. Hence, unless it is expressly provided that a legislative act is necessary to enforce a
constitutional mandate, the presumption now is that all provisions of the constitution are
self-executing. If the constitutional provisions are treated as requiring legislation instead of
self-executing, the legislature would have the power to ignore and practically nullify the
mandate of the fundamental law. This can be cataclysmic. That is why the prevailing view is,
as it has always been, that
. . . in case of doubt, the Constitution should be considered self-executing rather than nonself-executing. . . . Unless the contrary is clearly intended, the provisions of the Constitution
should be considered self-executing, as a contrary rule would give the legislature discretion
to determine when, or whether, they shall be effective. These provisions would be
subordinated to the will of the lawmaking body, which could make them entirely
meaningless by simply refusing to pass the needed implementing statute. 49
In further discussing self-executing provisions, this Court stated that:
In self-executing constitutional provisions, the legislature may still enact legislation to
facilitate the exercise of powers directly granted by the constitution, further the operation of
such a provision, prescribe a practice to be used for its enforcement, provide a convenient
remedy for the protection of the rights secured or the determination thereof, or place
reasonable safeguards around the exercise of the right. The mere fact that legislation may
supplement and add to or prescribe a penalty for the violation of a self-executing
constitutional provision does not render such a provision ineffective in the absence of such
legislation. The omission from a constitution of any express provision for a remedy for
enforcing a right or liability is not necessarily an indication that it was not intended to be
self-executing. The rule is that a self-executing provision of the constitution does not
necessarily exhaust legislative power on the subject, but any legislation must be in harmony
with the constitution, further the exercise of constitutional right and make it more available.
Subsequent legislation however does not necessarily mean that the subject constitutional
provision is not, by itself, fully enforceable. 50

Thus, the constitutional mandates of protection to labor and security of tenure may be
deemed as self-executing in the sense that these are automatically acknowledged and
observed without need for any enabling legislation. However, to declare that the
constitutional provisions are enough to guarantee the full exercise of the rights embodied
therein, and the realization of ideals therein expressed, would be impractical, if not
unrealistic. The espousal of such view presents the dangerous tendency of being overbroad
and exaggerated. The guarantees of "full protection to labor" and "security of tenure", when
examined in isolation, are facially unqualified, and the broadest interpretation possible
suggests a blanket shield in favor of labor against any form of removal regardless of
circumstance. This interpretation implies an unimpeachable right to continued employment
a utopian notion, doubtless but still hardly within the contemplation of the framers.
Subsequent legislation is still needed to define the parameters of these guaranteed rights to
ensure the protection and promotion, not only the rights of the labor sector, but of the
employers' as well. Without specific and pertinent legislation, judicial bodies will be at a loss,
formulating their own conclusion to approximate at least the aims of the Constitution.
HAEIac
Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a source of a positive
enforceable right to stave off the dismissal of an employee for just cause owing to the failure
to serve proper notice or hearing. As manifested by several framers of the 1987
Constitution, the provisions on social justice require legislative enactments for their
enforceability. This is reflected in the record of debates on the social justice provisions of the
Constitution:
MS. [FELICITAS S.] AQUINO: We appreciate the concern of the Commissioner. But this
Committee [on Social Justice] has actually become the forum already of a lot of specific
grievances and specific demands, such that understandably, we may have been, at one time
or another, dangerously treading into the functions of legislation. Our only plea to the
Commission is to focus our perspective on the matter of social justice and its rightful place
in the Constitution. What we envision here is a mandate specific enough that would give
impetus for statutory implementation. We would caution ourselves in terms of the judicious
exercise of self-censorship against treading into the functions of legislation. (emphasis
supplied) 51
xxx

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xxx

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

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xxx

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

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MS. [MINDA LUZ M.] QUESADA: I think the nitty-gritty of this kind of collaboration will be left
to legislation but the important thing now is the conservation, utilization or maximization of
the very limited resources. . . .

[RICARDO J.] ROMULO: The other problem is that, by and large, government services are
inefficient. So, this is a problem all by itself. On Section 19, where the report says that
people's organizations as a principal means of empowering the people to pursue and protect
through peaceful means. . . ., I do not suppose that the Committee would like to either
preempt or exclude the legislature, because the concept of a representative and democratic
system really is that the legislature is normally the principal means. HICSTa
[EDMUNDO G.] GARCIA: That is correct. In fact, people cannot even dream of influencing the
composition or the membership of the legislature, if they do not get organized. It is, in fact,
a recognition of the principle that unless a citizenry is organized and mobilized to pursue its
ends peacefully, then it cannot really participate effectively. 54
There is no pretense on the part of the framers that the provisions on Social Justice,
particularly Section 3 of Article XIII, are self-executory. Still, considering the rule that
provisions should be deemed self-executing if enforceable without further legislative action,
an examination of Section 3 of Article XIII is warranted to determine whether it is complete
in itself as a definitive law, or if it needs future legislation for completion and enforcement.
55 Particularly, we should inquire whether or not the provision voids the dismissal of a
laborer for just cause if no valid notice or hearing is attendant.
Constitutional Commissioner Fr. Joaquin G. Bernas makes a significant comment on Section
3, Article XIII of the 1987 Constitution:
The [cluster] of rights guaranteed in the second paragraph are the right "to security of
tenure, humane conditions of work, and a living wage." Again, although these have been set
apart by a period (.) from the next sentence and are therefore not modified by the final
phrase "as may be provided by law," it is not the intention to place these beyond the reach
of valid laws. . . . (emphasis supplied) 56
At present, the Labor Code is the primary mechanism to carry out the Constitution's
directives. This is clear from Article 3 57 under Chapter 1 thereof which essentially restates
the policy on the protection of labor as worded in the 1973 Constitution, which was in force
at the time of enactment of the Labor Code. It crystallizes the fundamental law's policies on
labor, defines the parameters of the rights granted to labor such as the right to security of
tenure, and prescribes the standards for the enforcement of such rights in concrete terms.
While not infallible, the measures provided therein tend to ensure the achievement of the
constitutional aims.
The necessity for laws concretizing the constitutional principles on the protection of labor is
evident in the reliance placed upon such laws by the Court in resolving the issue of the
validity of a worker's dismissal. In cases where that was the issue confronting the Court, it
consistently recognized the constitutional right to security of tenure and employed the
standards laid down by prevailing laws in determining whether such right was violated. 58
The Court's reference to laws other than the Constitution in resolving the issue of dismissal
is an implicit acknowledgment that the right to security of tenure, while recognized in the
Constitution, cannot be implemented uniformly absent a law prescribing concrete standards
for its enforcement.
As discussed earlier, the validity of an employee's dismissal in previous cases was examined
by the Court in accordance with the standards laid down by Congress in the Termination Pay
Law, and subsequently, the Labor Code and the amendments thereto. At present, the
validity of an employee's dismissal is weighed against the standards laid down in Article
279, as well as Article 282 in relation to Article 277(b) of the Labor Code, for a dismissal for
just cause, and Article 283 for a dismissal for an authorized cause. HEDCAS
The Effect of Statutory Violation

Of Notice and Hearing


There is no doubt that the dismissal of an employee even for just cause, without prior notice
or hearing, violates the Labor Code. However, does such violation necessarily void the
dismissal?
Before I proceed with my discussion on dismissals for just causes, a brief comment regarding
dismissals for authorized cause under Article 283 of the Labor Code. While the justiciable
question in Serrano pertained to a dismissal for unauthorized cause, the ruling therein was
crafted as definitive to dismissals for just cause. Happily, the Decision today does not adopt
the same unwise tack. It should be recognized that dismissals for just cause and dismissals
for authorized cause are governed by different provisions, entail divergent requisites, and
animated by distinct rationales. The language of Article 283 expressly effects the
termination for authorized cause to the service of written notice on the workers and the
Ministry of Labor at least one (1) month before the intended date of termination. This
constitutes an eminent difference than dismissals for just cause, wherein the causal relation
between the notice and the dismissal is not expressly stipulated. The circumstances
distinguishing just and authorized causes are too markedly different to be subjected to the
same rules and reasoning in interpretation.
Since the present petition is limited to a question arising from a dismissal for just cause,
there is no reason for making any pronouncement regarding authorized causes. Such
declaration would be merely obiter, since they are neither the law of the case nor dispositive
of the present petition. When the question becomes justiciable before this Court, we will be
confronted with an appropriate factual milieu on which we can render a more judicious
disposition of this admittedly important question.
B.

Dismissal for Just Cause

There is no express provision in the Labor Code that voids a dismissal for just cause on the
ground that there was no notice or hearing. Under Section 279, the employer is precluded
from dismissing an employee except for a just cause as provided in Section 282, or an
authorized cause under Sections 283 and 284. Based on reading Section 279 alone, the
existence of just cause by itself is sufficient to validate the termination.
Just cause is defined by Article 282, which unlike Article 283, does not condition the
termination on the service of written notices. Still, the dissenting opinions propound that
even if there is just cause, a termination may be invalidated due to the absence of notice or
hearing. This view is anchored mainly on constitutional moorings, the basis of which I had
argued against earlier. For determination now is whether there is statutory basis under the
Labor Code to void a dismissal for just cause due to the absence of notice or hearing.
DaHISE
As pointed out by Justice Mendoza in Serrano, it was only in 1989 that the Labor Code was
amended to enshrine into statute the twin requirements of notice and hearing. 59 Such
requirements are found in Article 277 of the Labor Code, under the heading "Miscellaneous
Provisions." Prior to the amendment, the notice-hearing requirement was found under the
implementing rules issued by the then Minister of Labor in 1981. The present-day
implementing rules likewise mandate that the standards of due process, including the
requirement of written notice and hearing, "be substantially observed." 60
Indubitably, the failure to substantially comply with the standards of due process, including
the notice and hearing requirement, may give rise to an actionable claim against the
employer. Under Article 288, penalties may arise from violations of any provision of the
Labor Code. The Secretary of Labor likewise enjoys broad powers to inquire into existing
relations between employers and employees. Systematic violations by management of the

statutory right to due process would fall under the broad grant of power to the Secretary of
Labor to investigate under Article 273.
However, the remedy of reinstatement despite termination for just cause is simply not
authorized by the Labor Code. Neither the Labor Code nor its implementing rules states that
a termination for just cause is voided because the requirement of notice and hearing was
not observed. This is not simply an inadvertent semantic failure, but a conscious effort to
protect the prerogatives of the employer to dismiss an employee for just cause. Notably,
despite the several pronouncements by this Court in the past equating the notice-hearing
requirement in labor cases to a constitutional maxim, neither the legislature nor the
executive has adopted the same tack, even gutting the protection to provide that substantial
compliance with due process suffices.
The Labor Code significantly eroded management prerogatives in the hiring and firing of
employees. Whereas employees could be dismissed even without just cause under the
Termination Pay Law 61 , the Labor Code affords workers broad security of tenure. Still, the
law recognizes the right of the employer to terminate for just cause. The just causes
enumerated under the Labor Code serious misconduct or willful disobedience, gross and
habitual neglect, fraud or willful breach of trust, commission of a crime by the employee
against the employer, and other analogous causes are characterized by the harmful
behavior of an employee against the business or the person of the employer.
These just causes for termination are not negated by the absence of notice or hearing. An
employee who tries to kill the employer cannot be magically absolved of trespasses just
because the employer forgot to serve due notice. Or a less extreme example, the gross and
habitual neglect of an employee will not be improved upon just because the employer failed
to conduct a hearing prior to termination.
In fact, the practical purpose of requiring notice and hearing is to afford the employee the
opportunity to dispute the contention that there was just cause in the dismissal. Yet it must
be understood if a dismissed employee is deprived of the right to notice and hearing, and
thus denied the opportunity to present countervailing evidence that disputes the finding of
just cause, reinstatement will be valid not because the notice and hearing requirement was
not observed, but because there was no just cause in the dismissal. The opportunity to
dispute the finding of the just cause is readily available before the Labor Arbiter, and the
subsequent levels of appellate review. Again, as held in Serrano:
Even in cases of dismissal under Art. 282, the purpose for the requirement of notice and
hearing is not to comply with the Due Process Clause of the Constitution. The time for notice
and hearing is at the trial stage. Then that is the time we speak of notice and hearing as the
essence of procedural due process. Thus, compliance by the employer with the notice
requirement before he dismisses an employee does not foreclose the right of the latter to
question the legality of his dismissal. As Art. 277(b) provides, "Any decision taken by the
employer shall be without prejudice to the right of the worker to contest the validity or
legality of his dismissal by filing a complaint with the regional branch of the National Labor
Relations Commission. 62
The Labor Code presents no textually demonstrable commitment to invalidate a dismissal
for just cause due to the absence of notice or hearing. This is not surprising, as such remedy
will not restore the employer or employee into equity. Absent a showing of integral
causation, the mutual infliction of wrongs does not negate either injury, but instead enforces
two independent rights of relief. DcaECT
The Damages' Dimensions
Award for Damages Must Have Statutory Basis

The Court has grappled with the problem of what should be the proper remedial relief of an
employee dismissed with just cause, but not afforded either notice or hearing. In a long line
of cases, beginning with Wenphil Corp. v. NLRC 63 and up until Serrano in 2000, the Court
had deemed an indemnification award as sufficient to answer for the violation by the
employer against the employee. However, the doctrine was modified in Serrano.
I disagree with Serrano insofar as it held that employees terminated for just cause are to be
paid backwages from the time employment was terminated "until it is determined that the
termination is for just cause because the failure to hear him before he is dismissed renders
the termination of his employment without legal effect." 64 Article 279 of the Labor Code
clearly authorizes the payment of backwages only if an employee is unjustly dismissed. A
dismissal for just cause is obviously antithetical to an unjust dismissal. An award for
backwages is not clearly warranted by the law.
The Impropriety of Award for Separation Pay
The formula of one month's pay for every year served does have statutory basis. It is found
though in the Labor Code, not the Civil Code. Even then, such computation is made for
separation pay under the Labor Code. But separation pay is not an appropriate as a remedy
in this case, or in any case wherein an employee is terminated for just cause. As Justice
Vitug noted in his separate opinion in Serrano, an employee whose employment is
terminated for a just cause is not entitled to the payment of separation benefits. 65
Separation pay is traditionally a monetary award paid as an alternative to reinstatement
which can no longer be effected in view of the long passage of time or because of the
realities of the situation. 66 However, under Section 7, Rule 1, Book VI of the Omnibus Rules
Implementing the Labor Code, "[t]he separation from work of an employee for a just cause
does not entitle him to the termination pay provided in the Code." 67 Neither does the Labor
Code itself provide instances wherein separation pay is warranted for dismissals with just
cause. Separation pay is warranted only for dismissals for authorized causes, as enumerated
in Article 283 and 284 of the Labor Code.
The Impropriety of Equity Awards
Admittedly, the Court has in the past authorized the award of separation pay for duly
terminated employees as a measure of social justice, provided that the employee is not
guilty of serious misconduct reflecting on moral character. 68 This doctrine is inapplicable in
this case, as the Agabons are guilty of abandonment, which is the deliberate and unjustified
refusal of an employee to resume his employment. Abandonment is tantamount to serious
misconduct, as it constitutes a willful breach of the employer-employee relationship without
cause. IcSEAH
The award of separation pay as a measure of social justice has no statutory basis, but clearly
emanates from the Court's so-called "equity jurisdiction." The Court's equity jurisdiction as a
basis for award, no matter what form it may take, is likewise unwarranted in this case. Easy
resort to equity should be avoided, as it should yield to positive rules which pre-empt and
prevail over such persuasions. 69 Abstract as the concept is, it does not admit to definite
and objective standards.
I consider the pronouncement regarding the proper monetary awards in such cases as
Wenphil Corp. v. NLRC, 70 Reta, 71 and to a degree, even Serrano as premised in part on
equity. This decision is premised in part due to the absence of cited statutory basis for these
awards. In these cases, the Court deemed an indemnity award proper without exactly saying
where in statute could such award be derived at. Perhaps, equity or social justice can be
invoked as basis for the award. However, this sort of arbitrariness, indeterminacy and
judicial usurpation of legislative prerogatives is precisely the source of my discontent. Social
justice should be the aspiration of all that we do, yet I think it the more mature attitude to

consider that it ebbs and flows within our statutes, rather than view it as an independent
source of funding.
Article 288 of the Labor Code as a Source of Liability
Another putative source of liability for failure to render the notice requirement is Article 288
of the Labor Code, which states:
Article 288 states:
Penalties. Except as otherwise provided in this Code, or unless the acts complained of
hinges on a question of interpretation or implementation of ambiguous provisions of an
existing collective bargaining agreement, any violation of the provisions of this Code
declared to be unlawful or penal in nature shall be punished with a fine of not less than One
Thousand Pesos (P1,000.00) nor more than Ten Thousand Pesos (P10,000.00), or
imprisonment of not less than three months nor more than three years, or both such fine
and imprisonment at the discretion of the court.
It is apparent from the provision that the penalty arises due to contraventions of the
provisions of the Labor Code. It is also clear that the provision comes into play regardless of
who the violator may be. Either the employer or the employee may be penalized, or perhaps
even officials tasked with implementing the Labor Code.
However, it is apparent that Article 288 is a penal provision; hence, the prescription for
penalties such as fine and imprisonment. The Article is also explicit that the imposition of
fine or imprisonment is at the "discretion of the court." Thus, the proceedings under the
provision is penal in character. The criminal case has to be instituted before the proper
courts, and the Labor Code violation subject thereof duly proven in an adversarial
proceeding. Hence, Article 288 cannot apply in this case and serve as basis to impose a
penalty on Riviera Homes. HASDcC
I also maintain that under Article 288 the penalty should be paid to the State, and not to the
person or persons who may have suffered injury as a result of the violation. A penalty is a
sum of money which the law requires to be paid by way of punishment for doing some act
which is prohibited or for not doing some act which is required to be done. 72 A penalty
should be distinguished from damages which is the pecuniary compensation or indemnity to
a person who has suffered loss, detriment, or injury, whether to his person, property, or
rights, on account of the unlawful act or omission or negligence of another. Article 288
clearly serves as a punitive fine, rather than a compensatory measure, since the provision
penalizes an act that violates the Labor Code even if such act does not cause actual injury to
any private person.
Independent of the employee's interests protected by the Labor Code is the interest of the
State in seeing to it that its regulatory laws are complied with. Article 288 is intended to
satiate the latter interest. Nothing in the language of Article 288 indicates an intention to
compensate or remunerate a private person for injury he may have sustained.
It should be noted though that in Serrano, the Court observed that since the promulgation of
Wenphil Corp. v. NLRC 73 in 1989, "fines imposed for violations of the notice requirement
have varied from P1,000.00 to P2,000.00 to P5,000.00 to P10,000.00." 74 Interestingly, this
range is the same range of the penalties imposed by Article 288. These "fines" adverted to
in Serrano were paid to the dismissed employee. The use of the term "fines," as well as the
terminology employed a few other cases, 75 may have left an erroneous impression that the
award implemented beginning with Wenphil was based on Article 288 of the Labor Code. Yet,
an examination of Wenphil reveals that what the Court actually awarded to the employee
was an "indemnity", dependent on the facts of each case and the gravity of the omission

committed by the employer. There is no mention in Wenphil of Article 288 of the Labor Code,
or indeed, of any statutory basis for the award.
The Proper Basis: Employer's Liability under the Civil Code
As earlier stated, Wenphil allowed the payment of indemnity to the employee dismissed for
just cause is dependent on the facts of each case and the gravity of the omission committed
by the employer. However, I considered Wenphil flawed insofar as it is silent as to the
statutory basis for the indemnity award. This failure, to my mind, renders it unwise for to
reinstate the Wenphil rule, and foster the impression that it is the judicial business to invent
awards for damages without clear statutory basis.
The proper legal basis for holding the employer liable for monetary damages to the
employee dismissed for just cause is the Civil Code. The award of damages should be
measured against the loss or injury suffered by the employee by reason of the employer's
violation or, in case of nominal damages, the right vindicated by the award. This is the
proper paradigm authorized by our law, and designed to obtain the fairest possible relief .
Under Section 217(4) of the Labor Code, the Labor Arbiter has jurisdiction over claims for
actual, moral, exemplary and other forms of damages arising from the employer-employee
relations. It is thus the duty of Labor Arbiters to adjudicate claims for damages, and they
should disabuse themselves of any inhibitions if it does appear that an award for damages is
warranted. As triers of facts in a specialized field, they should attune themselves to the
particular conditions or problems attendant to employer-employee relationships, and thus be
in the best possible position as to the nature and amount of damages that may be warranted
in this case.
The damages referred under Section 217(4) of the Labor Code are those available under the
Civil Code. It is but proper that the Civil Code serve as the basis for the indemnity, it being
the law that regulates the private relations of the members of civil society, determining their
respective rights and obligations with reference to persons, things, and civil acts. 76 No
matter how impressed with the public interest the relationship between a private employer
and employee is, it still is ultimately a relationship between private individuals. Notably,
even though the Labor Code could very well have provided set rules for damages arising
from the employer-employee relationship, referral was instead made to the concept of
damages as enumerated and defined under the Civil Code. HSDIaC
Given the long controversy that has dogged this present issue regarding dismissals for just
cause, it is wise to lay down standards that would guide the proper award of damages under
the Civil Code in cases wherein the employer failed to comply with statutory due process in
dismissals for just cause.
First. I believe that it can be maintained as a general rule, that failure to comply with the
statutory requirement of notice automatically gives rise to nominal damages, at the very
least, even if the dismissal was sustained for just cause.
Nominal damages are adjudicated in order that a right of a plaintiff which has been violated
or invaded by another may be vindicated or recognized without having to indemnify the
plaintiff for any loss suffered by him. 77 Nominal damages may likewise be awarded in every
obligation arising from law, contracts, quasi-contracts, acts or omissions punished by law,
and quasi-delicts, or where any property right has been invaded.
Clearly, the bare act of failing to observe the notice requirement gives rise to nominal
damages assessable against the employer and due the employee. The Labor Code
indubitably entitles the employee to notice even if dismissal is for just cause, even if there is
no apparent intent to void such dismissals deficiently implemented. It has also been held

that one's employment, profession, trade, or calling is a "property right" and the wrongful
interference therewith gives rise to an actionable wrong. 78
In Better Buildings, Inc. v. NLRC, 79 the Court ruled that while the termination therein was
for just and valid cause, the manner of termination was done in complete disregard of the
necessary procedural safeguards. 80 The Court found nominal damages as the proper form
of award, as it was purposed to vindicate the right to procedural due process violated by the
employer. 81 A similar holding was maintained in Iran v. NLRC 82 and Malaya Shipping v.
NLRC. 83 The doctrine has express statutory basis, duly recognizes the existence of the right
to notice, and vindicates the violation of such right. It is sound, logical, and should be
adopted as a general rule.
The assessment of nominal damages is left to the discretion of the court, 84 or in labor
cases, of the Labor Arbiter and the successive appellate levels. The authority to nominate
standards governing the award of nominal damages has clearly been delegated to the
judicial branch, and it will serve good purpose for this Court to provide such guidelines.
Considering that the affected right is a property right, there is justification in basing the
amount of nominal damages on the particular characteristics attaching to the claimant's
employment. Factors such as length of service, positions held, and received salary may be
considered to obtain the proper measure of nominal damages. After all, the degree by which
a property right should be vindicated is affected by the estimable value of such right.
At the same time, it should be recognized that nominal damages are not meant to be
compensatory, and should not be computed through a formula based on actual losses.
Consequently, nominal damages are usually limited in pecuniary value. 85 This fact should
be impressed upon the prospective claimant, especially one who is contemplating seeking
actual/compensatory damages.
Second. Actual or compensatory damages are not available as a matter of right to an
employee dismissed for just cause but denied statutory due process. They must be based on
clear factual and legal bases, 86 and correspond to such pecuniary loss suffered by the
employee as duly proven. 87 Evidently, there is less degree of discretion to award actual or
compensatory damages.
I recognize some inherent difficulties in establishing actual damages in cases for
terminations validated for just cause. The dismissed employee retains no right to continued
employment from the moment just cause for termination exists, and such time most likely
would have arrived even before the employer is liable to send the first notice. As a result, an
award of backwages disguised as actual damages would almost never be justified if the
employee was dismissed for just cause. The possible exception would be if it can be proven
the ground for just cause came into being only after the dismissed employee had stopped
receiving wages from the employer. TaDSHC
Yet it is not impossible to establish a case for actual damages if dismissal was for just cause.
Particularly actionable, for example, is if the notices are not served on the employee, thus
hampering his/her opportunities to obtain new employment. For as long as it can be
demonstrated that the failure of the employer to observe procedural due process mandated
by the Labor Code is the proximate cause of pecuniary loss or injury to the dismissed
employee, then actual or compensatory damages may be awarded.
Third. If there is a finding of pecuniary loss arising from the employer violation, but the
amount cannot be proved with certainty, then temperate or moderate damages are
available under Article 2224 of the Civil Code. Again, sufficient discretion is afforded to the
adjudicator as regards the proper award, and the award must be reasonable under the
circumstances. 88 Temperate or nominal damages may yet prove to be a plausible remedy,

especially when common sense dictates that pecuniary loss was suffered, but incapable of
precise definition.
Fourth. Moral and exemplary damages may also be awarded in the appropriate
circumstances. As pointed out by the Decision, moral damages are recoverable where the
dismissal of the employee was attended by bad faith, fraud, or was done in a manner
contrary to morals, good customs or public policy, or the employer committed an act
oppressive to labor. 89 Exemplary damages may avail if the dismissal was effected in a
wanton, oppressive or malevolent manner.
Appropriate Award of Damages to the Agabons
The records indicate no proof exists to justify the award of actual or compensatory damages,
as it has not been established that the failure to serve the second notice on the Agabons
was the proximate cause to any loss or injury. In fact, there is not even any showing that
such violation caused any sort of injury or discomfort to the Agabons. Nor do they assert
such causal relation. Thus, the only appropriate award of damages is nominal damages.
Considering the circumstances, I agree that an award of Fifteen Thousand Pesos
(P15,000.00) each for the Agabons is sufficient.
All premises considered, I VOTE to:
(1)
DENY the PETITION for lack of merit, and AFFIRM the Decision of the Court of Appeals
dated 23 January 2003, with the MODIFICATION that in addition, Riviera Homes be ORDERED
to pay the petitioners the sum of Fifteen Thousand Pesos (P15,000.00) each, as nominal
damages. IHAcCS
(2)
HOLD that henceforth, dismissals for just cause may not be invalidated due to the
failure to observe the due process requirements under the Labor Code, and that the only
indemnity award available to the employee dismissed for just cause are damages under the
Civil Code as duly proven. Any and all previous rulings and statements of the Court
inconsistent with this holding are now deemed INOPERATIVE.