Labor Relation
Case Digest
Case Facts
GENERAL TEXTILE, Private respondent Rodolfo Lopez was employed by petitioner Gentex Inc. as
INC. and EDGAR machine operator. Lopez fell ill, he was later diagnosed as suffering from
TOLENTINO vs. NLRC moderately advanced pulmonary tuberculosis. He went on sick leave upon the
advice of the company physician and was later granted by the Social Security
(no abandonment) System sickness benefits for 60 days, he went to Gentex with the intention of
returning to work. He was instead told by the company physician to extend his
leave for another 6 months. He was confined at the Quezon Institute. This fact
was known to Gentex, as its personnel manager, petitioner Edgar Tolentino,
accomplished Lopez' Medicare form. Tolentino, sent Lopez a Notice of
Termination informing him of the termination of his employment "immediately
upon receipt of this notice" on the ground that he had been absent without
official leave. Lopez filed a complaint against Gentex and- Tolentino for illegal
dismissal and for non-payment of the thirteenth-month pay and service incentive
leave for the year. In their defense, petitioners contended that Lopez abandoned
work beginning September 17,1988. Labor Arbiter ordered the reinstatenent of
Lopez with full backwages from the time his salary was witheld until his actual
reinstatement, subject to his fitness for work. On appeal, NLRC ruled that as
there was no abandonment, Lopez' dismissal on such ground was illegal.
However, NLRC ruled that Lopez' reinstatement could not be forced upon
Gentex, since there was showing that his pulmonary tuberculosis was already
arrested.
FEDERICO M. Petitioner was employed as a service driver by the private respondent on
LEDESMA, JR. probationary basis, he was required to report at private respondents training site
vs. NLRC in Dasmarias, Cavite, under the direct supervision of its site administrator,
Pablo Manolo de Leon. Petitioner filed a complaint against de Leon for allegedly
(with abandonment) abusing his authority as site, immoral conduct allegedly carried out within the
private respondents premises. A copy of the complaint was duly received by
private respondents Chief Accountant, Nita Azarcon. De Leon filed a written
report against the petitioner addressed to private respondents Vice-President for
Administration, Ty citing his suspected drug use. Private respondents Human
Resource Manager, Cueva served a copy of a Notice to petitioner requiring him
to explain within why no disciplinary action should be imposed on him instead he
filed a complaint for illegal dismissal against private respondent before the Labor
Arbiter. In his Position Paper, petitioner averred that in view of the complaint he
filed against de Leon, the latter retaliated by falsely accusing petitioner as a drug
user. Ty, however, instead of verifying the veracity of report, readily believed his
allegations and together with Cueva, verbally dismissed him from service.
Petitioner immediately went to St. Dominic Medical Center for a drug test and he
was found negative for any drug substance. With his drug result on hand, he
went back to private respondents main office to talk to Ty and Cueva and to
show to them his drug test result, since his drug test proved that he was not
guilty of the drug use charge against him, he decided to continue to work.
Issue/s
Whether or not an employee has abandoned his work
Whether or not CA subverted due process of law when
it did not consider the evidence on record showing that
there was no just cause for dismissal as petitioner is
not a drug user and there is no evidence to support
this ground for dismissal.
Ruling
Section 8, Rule I, Book VI of the Rules to Implement the Labor
Code, reads as follows:
Disease as a ground for dismissal. Where the employee
suffers from a disease and his continued employment is
prohibited by law or prejudicial to his health or to the health of
his co-employees, the employer shall not terminate his
employment unless there is a certification by a competent
public health authority that the disease is of such nature or at
such a stage that it cannot be cured within a period of 6
months even with proper medical treatment . If the disease or
ailment can be cured within the period, the employer shall not
terminate the employee but shall ask the employee to take a
leave. The employer shall reinstate such employee to his
former position immediately upon the restoration of his normal
health.
The preceding provision explicitly requires a certification by a
competent public health authority that the disease is of such
nature or at such a stage that it cannot be cured within a period
of six months even with proper medical treatment. There is no
showing that such a certification was presented in the course
of the proceedings before the Labor Arbiter and NLRC. Lopez
is entitled to 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.
We are also aware of the contingency that the illness of private
respondent be certified by a competent public health authority
as being of such nature or at such a stage that renders him
physically unfit to return to work. In such a case, separation
pay at the rate provided for in Article 284 must be paid private
respondent, in addition to the backwages for his illegal
dismissal.
It is best to stress that the issues raised by petitioner in this
instant petition are factual in nature which is not within the
office of a Petition for Review. The reason for this rule is
that, this Court is not a trier of facts and does not routinely
undertake the re-examination of the evidence presented
by the contending parties for the factual findings of the
labor officials who have acquired expertise in their own
fields are accorded not only respect but even finality, and
are binding upon this Court. However, when the findings of
the Labor Arbiter contradict those of the NLRC, departure from
the general rule is warranted, and this Court must of necessity
make an scrutiny and examine the records all over again
including the evidence presented by the opposing parties to
determine which findings should be preferred as more
conformable with evidentiary facts.
The Labor Arbiter found that the petitioner was illegally
dismissed from employment warranting the payment of his
backwages. The NLRC and the Court of Appeals found
otherwise.
In reversing the Labor Arbiters Decision, the NLRC
underscored the settled evidentiary rule that before the burden
1
 He reported for work but he was no longer allowed to enter the training site for
he was allegedly banned there from according to the guard on duty. Private
respondent countered that petitioner was never dismissed from employment but
merely served a Notice to Explain why no disciplinary action should be filed
against him in view of the report that he was suspected of using illegal drugs.
Instead of filing an answer, petitioner prematurely lodged a complaint for illegal
dismissal against private respondent before the Labor Arbiter.
Labor Arbiter rendered a Decision in favor of the petitioner declaring illegal his
separation from employment. The Labor Arbiter, however, did not order
petitioners reinstatement for the same was no longer practical, and only directed
private respondent to pay petitioner backwages. Both parties questioned the
Labor Arbiters Decision before the NLRC. Petitioner assailed the portion of the
Labor Arbiters Decision denying his prayer for reinstatement, private respondent
controverted the Labor Arbiters finding that petitioner was illegally dismissed
from employment, and insisted that petitioner was never dismissed from his job
but failed to report to work.
NLRC granted the appeal raised by both parties and reversed the Labor Arbiters
Decision. The NLRC declared that petitioner failed to establish the fact of
dismissal for his claim that he was banned from entering the training site was
rendered impossible by the fact that he was able to subsequently claim his
salary and 13th month pay. Petitioners claim for reinstatement was, however,
granted by the NLRC. The Motion for Reconsideration filed by petitioner was
likewise denied by the NLRC in its Resolution.
The Court of Appeals dismissed petitioners Petition for Certiorari and affirmed
the NLRC decision giving more credence to private respondents stance that
petitioner was not dismissed from employment, as it is more in accord with the
evidence on record and the attendant circumstances of the instant case.
Petitioners Motion for Reconsideration was denied by CA.
Hence, this instant Petition for Review on Certiorari under Rule 45 was filed by
the petitioner.
JONERI ESCOBIN vs. PEFTOK Integrated Services, Inc., is a duly licensed watchman and protective
NLRC agency while respondent UP-NDC Basilan Plantations, Inc. is a corporation duly
G.R. No. 118159 organized in accordance with law, and the owner/possessor of lands principally
planted to rubber, coconut, citrus, coffee, and other fruit trees in Lamitan,
Province of Basilan. That complainants are bona fide members of the Basilan
Security Force Association hired by PISI to work as guards in UP-NDC Basilan
Plantations premises, for the purpose of guarding and protecting plantation
property and installations from theft, pilferage, robbery, trespass and other
unlawful acts by strangers or third persons, and plantation employees .
Petitioners filed at the Regional Arbitration Branch No. 09 in Zamboanga City a
Complaint against private respondents for illegal termination by way of
constructive dismissal. After conciliation proceedings failed to settle the matter,
the parties were ordered to submit their respective position papers. Labor
Arbiter rendered a Decision in favor of petitioners, declaring the dismissal to be
illegal for being without just cause. On appeal, Respondent Commission
reversed the labor arbiter and denied Motion for reconsideration.
I I
Whether or not the NLRC acted with grave abuse of
discretion in ruling that petitioners committed willful
disobedience of lawful orders of their employer.
II
Whether or not the NLRC acted with grave abuse of
discretion in ruling that petitioners abandoned their
work.
III
Whether or not the NLRC acted with grave abuse of
discretion in reversing the finding of the labor arbiter
that petitioners were illegally dismissed by way of
constructive dismissal.
IV
Whether or not the NLRC acted with grave abuse of
discretion in denying recovery of backwages,
separation pay, damages, and attorneys fees in favor
of petitioners.
of proof shifts to the employer to prove the validity of the
employees dismissal, the employee must first sufficiently
establish that he was indeed dismissed from employment. The
petitioner, in the present case, failed to establish the fact of his
dismissal. The NLRC did not give credence to petitioners
allegation that he was banned by the private respondent from
entering the workplace, opining that had it been true that
petitioner was no longer allowed to enter the training site when
he reported for work.
Well-entrenched is the principle that in order to establish a
case before judicial and quasi-administrative bodies, it is
necessary that allegations must be supported by substantial
evidence.
In the present case, there is hardly any evidence on record so
as to meet the quantum of evidence required, i.e., substantial
evidence. Petitioners claim of illegal dismissal is supported by
no other than his own bare, uncorroborated and, thus, self-
serving allegations, which are also incoherent, inconsistent and
contradictory.
It is true that the Constitution affords full protection to labor,
and that in light of this Constitutional mandate, we must be
vigilant in striking down any attempt of the management to
exploit or oppress the working class. However, it does not
mean that we are bound to uphold the working class in every
labor dispute brought before this Court for our resolution.
The law in protecting the rights of the employees, authorizes
neither oppression nor self-destruction of the employer. It
should be made clear that when the law tilts the scales of
justice in favor of labor, it is in recognition of the inherent
economic inequality between labor and management. The
intent is to balance the scales of justice; to put the two parties
on relatively equal positions.
CA Affirmed.
Respondent Commission committed grave abuse of discretion
in holding that petitioners were dismissed for a just cause. The
reasonableness and lawfulness of a rule, order or instruction
depend on the circumstances availing in each case.
Reasonableness pertains to the kind or character of directives
and commands and to the manner in which they are made. In
this case, the order to report to the Manila office fails to meet
this standard.
First, it was grossly inconvenient for petitioners, who were
residents and heads of families residing in Basilan, to commute
to Manila.
Second, petitioners were not provided with funds to defray their
transportation and living expenses.
Third, private respondent argues that it sent transportation
money to petitioners. However, the recipients of such funds
are not parties in this case.
Fourth, no reason was given by private respondent company
explaining why it had failed to inform petitioners of their specific
security assignments prior to their departure from Basilan. This
fact demonstrates that petitioners dismissal was not
commensurate to their insubordination which, we reiterate, was
neither willful nor intentional they very well knew that
petitioners were not receiving any salary while they were on
floating status and, thus, also knew that they would hardly be
2

WENPHIL Private respondent was hired by petitioner as a crew member at its Cubao
CORPORATION vs Branch. He thereafter became the assistant head of the Backroom department
NLRC of the same branch. On May 20, 1985 private respondent had an altercation with
a co-employee, Job Barrameda, as a result of which he and Barrameda were
G.R. No. 80587 suspended on the following morning and in the afternoon of the same day a
1989 memorandum was issued by the Operations Manager advising private
respondent of his dismissal from the service in accordance with their Personnel
Manual. The notice of dismissal was served on private respondent.
Thus private respondent filed a complaint against petitioner for unfair labor
practice, illegal suspension and illegal dismissal. After submitting their respective
WENPHIL DOCTRINE position papers to the Labor Arbiter and as the hearing could not be conducted
due to repeated absence of counsel for respondent, the case was submitted for
resolution. The decision was rendered by the Labor Arbiter by dismissing the
complaint for lack of merit.
Whether or not NLRC committed a grave abuse of
discretion in rendering its decision contrary to the
evidence on record.
able to comply with the directive to report to Manila. In any
event, dismissal was too harsh a penalty for an infraction which
appears, under the circumstances, to be excusable.
II
This contention is untenable. Abandonment, as a just and
valid cause for dismissal, requires a deliberate, unjustified
refusal of an employee to resume his work, coupled with a
clear absence of any intention of returning to his work. No
evidence was presented to establish that petitioners
relinquished their jobs. Denying they abandoned their work,
petitioners contend that it was private respondent agency
which deserted them by failing to communicate with them for
over two months, from February 1, 1991 to April 8, 1991
III
No constructive dismissal. Constructive discharge is an
involuntary resignation resorted to when continued
employment is rendered impossible, unreasonable or unlikely;
when there is a demotion in rank and/or a diminution in pay; or
when a clear discrimination, insensibility or disdain by an
employer becomes unbearable to the employee. In this
particular case, petitioners were not constructively dismissed;
they were actually dismissed without just and valid cause.
IV
The normal consequences of illegal dismissal are
reinstatement and payment of backwages. These remedies
give life to the workers constitutional right to security of tenure.
Separation pay is generally not awarded except in instances
where reinstatement is no longer feasible or appropriate, as in
this case. As a substitute for immediate and continued
reemployment, separation pay is meant to provide the
employee during the period that he is looking for another
employment.
In this particular case, private respondent alleges that there is
no assignment in Basilan or Zamboanga available to
petitioners. Transfer to another post outside said areas would
have only given rise to the same problems as those entailed by
the original directive. Reinstatement presupposes that the
previous position from which the employee had been removed
still exists, or there is an unfilled position of a similar nature,
more or less, as the one previously occupied by the employee.
If no such position is available, reinstatement becomes a legal
impossibility.
Petition is hereby GRANTED, The labor arbiters decision
reinstated.
The conclusion of the public respondent NLRC on appeal that
private respondent was not afforded due process before he
was dismissed is binding on this Court. Indeed, it is well taken
and supported by the records. However, it cannot justify a
ruling that private respondent should be reinstated with back
wages as the public respondent NLRC so decreed. Although
belatedly, private respondent was afforded due process before
the labor arbiter wherein the just cause of his dismissal had
been established. With such finding, it would be arbitrary and
unfair to order his reinstatement with back wages.
The Court holds that the policy of ordering the reinstatement to
the service of an employee without loss of seniority and the
payment of his wages during the period of his separation until
his actual reinstatement but not exceeding 3 years without
qualification or deduction, when it appears he was not afforded
3
 Private respondent appealed to NLRC wherein in due course a decision was
rendered setting aside the appealed decision and ordering the reinstatement of
private respondent to his former position without loss of seniority and other
related benefits and 1 year backwages without qualification and deduction.
Hence the herein petition for certiorari with preliminary injunction and/or
restraining order. The court issued a restraining order as prayed for in the
petition enjoining the enforcement of the decision of public respondent
NLRC upon petitioner posting a bond of P20,000.00.
BRENT SCHOOL INC. Doroteo R. Alegre was engaged as athletic director by Brent School. The
VS ZAMORA contract fixed a specific term for its existence, five (5) years, subsequent
subsidiary agreements reiterated the same terms and conditions, including the
G.R. No. L-48494 expiry date, as those contained in the original contract. Three months before the
expiration of the stipulated period, Alegre was given a copy of the report filed by
Brent School with the Department of Labor advising of the termination of his
services effective on July 16, 1976. The stated ground for the termination was
"completion of contract, expiration of the definite period of employment." And a
month or so later, on May 26, 1976, Alegre accepted the amount of P3,177.71,
BRENT DOCTRINE and signed a receipt therefor containing the phrase, "in full payment of services
for the period May 16, to July 17, 1976 as full payment of contract."
However, at the investigation conducted by a Labor Conciliator of said report of
termination of his services, Alegre protested the announced termination of his
employment. He argued that although his contract did stipulate that the same
would terminate on July 17, 1976, since his services were necessary and
desirable in the usual business of his employer, and his employment had lasted
for five years, he had acquired the status of a regular employee and could not be
removed except for valid cause.
The Regional Director considered Brent School's report as an application for
clearance to terminate employment (not a report of termination), and accepting
the recommendation of the Labor Conciliator, refused to give such clearance
and instead required the reinstatement of Alegre, as a "permanent employee," to
his former position without loss of seniority rights and with full back wages.
Whether or not Alegres contract of employment is
subject to a term or he is deemed permanent and can
be removed only upon just cause
due process, although his dismissal was found to be for just
and authorized cause in an appropriate proceeding in the
Ministry of Labor and Employment, should be re-examined. It
will be highly prejudicial to the interests of the employer to
impose on him the services of an employee who has been
shown to be guilty of the charges that warranted his dismissal
from employment. Indeed, it will demoralize the rank and file if
the undeserving, if not undesirable, remains in the service.
Thus in the present case, where the private respondent, who
appears to be of violent temper, caused trouble during office
hours and even defied his superiors as they tried to pacify him,
should not be rewarded with re-employment and back wages.
It may encourage him to do even worse and will render a
mockery of the rules of discipline that employees are required
to observe. Under the circumstances the dismissal of the
private respondent for just cause should be maintained. He
has no right to return to his former employer.
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.
The questioned decision of the public respondent NLRC for the
reinstatement with back wages of private respondent is
REVERSED AND SET ASIDE, and the decision of the labor
arbiter dated dismissing the complaint is revived and affirmed,
but with the modification that petitioner is ordered to indemnify
private respondent in the amount of P1,000.00. The restraining
order issued by this Court is hereby made permanent and the
bond posted by petitioner is cancelled.
The employment contract between Brent School and Alegre
was executed at a time when the Labor Code of the Philippines
(P.D. 442) had not yet been promulgated. Indeed, the Code did
not come into effect some 3 years after the perfection of the
employment contract, and rights and obligations thereunder
had arisen and been mutually observed and enforced.
At that time before the advent of the Labor Code, there was no
doubt whatever about the validity of term employment. It was
impliedly but nonetheless clearly recognized by the
Termination Pay Law, R.A. 1052, as amended by R.A. 1787.
Basically, this statute provided that
In cases of employment, without a definite period, in a
commercial, industrial, or agricultural establishment or
enterprise, the employer or the employee may terminate at any
time the employment with just cause; or without just cause in
the case of an employee by serving written notice on the
employer at least one month in advance, or in the case of an
employer, by serving such notice to the employee at least one
month in advance or one-half month for every year of service
of the employee, whichever is longer, a fraction of at least six
months being considered as one whole year.
4

Brent School filed a motion for reconsideration. The Regional Director denied the
motion and forwarded the case to the Secretary of Labor for review. The latter
sustained the Regional Director. Brent appealed to the Office of the President.
Again it was rebuffed. That Office dismissed its appeal for lack of merit and
affirmed the Labor Secretary's decision, ruling that Alegre was a permanent
employee who could not be dismissed except for just cause, and expiration of
the employment contract was not one of the just causes provided in the Labor
Code for termination of services.
The School is now before this Court in a last attempt at vindication.
SERRANO VS NLRC Petitioner was hired by private respondent Isetann Department Store as a
security checker to apprehend shoplifters and prevent pilferage of merchandise.
G.R. No 117040 Initially hired on contractual basis, petitioner eventually became a regular
2000 employee on 1985. In 1988, he became head of the Security Checkers Section
of private respondent. Sometime in 1991, as a cost-cutting measure, private
respondent decided to phase out its entire security section and engage the
services of an independent security agency. The loss of his employment
prompted petitioner to file a complaint for illegal dismissal, illegal layoff, unfair
SERRANO DOCTRINE labor practice, underpayment of wages, and nonpayment of salary and overtime
pay.
The Labor Arbiter rendered a decision finding petitioner to have been illegally
dismissed. He ruled that private respondent failed to establish that it had
retrenched its security section to prevent or minimize losses to its business; that
private respondent failed to accord due process to petitioner; that private
respondent failed to use reasonable standards in selecting employees whose
employment would be terminated; that private respondent had not shown that
petitioner and other employees in the security section were so inefficient so as to
justify their replacement by a security agency, or that "cost-saving devices such
as secret video cameras and secret code tags on the merchandise" could not
have been employed; instead, the day after petitioners dismissal, private
respondent employed a safety and security supervisor with duties and functions
similar to those of petitioner.
Private respondent appealed to the NLRC which, in its resolution reversed the
decision of the Labor Arbiter and ordered petitioner to be given separation pay
equivalent to one month pay for every year of service, unpaid salary, and
Whether or not the petitioner is laid off for a cause
considered as one (1) whole year.
The employer, upon whom no such notice was served in case
of termination of employment without just cause, may hold the
employee liable for damages.
The employee, upon whom no such notice was served in case
of termination of employment without just cause, shall be
entitled to compensation from the date of termination of his
employment in an amount equivalent to his salaries or wages
corresponding to the required period of notice.
It is plain then that when the employment contract was signed
between Brent School and Alegre it was perfectly legitimate for
them to include in it a stipulation fixing the duration thereof
Stipulations for a term were explicitly recognized as valid by
this Court.
It should have no application to instances where a fixed period
of employment was agreed upon knowingly and voluntarily by
the parties, without any force, duress or improper pressure
being brought to bear upon the employee and absent any other
circumstances vitiating his consent, or where it satisfactorily
appears that the employer and employee dealt with each other
on more or less equal terms with no moral dominance
whatever being exercised by the former over the latter. Unless
thus limited in its purview, the law would be made to apply to
purposes other than those explicitly stated by its framers; it
thus becomes pointless and arbitrary, unjust in its effects and
apt to lead to absurd and unintended consequence.
Respondent Alegre's contract of employment with Brent
School having lawfully terminated with and by reason of the
expiration of the agreed term of period thereof, he is declared
not entitled to reinstatement and the other relief awarded and
confirmed on appeal.
Decision complained of is REVERSED and SET ASIDE
Art. 283 provides:
Closure of establishment and reduction of personnel. - The
employer may also terminate the employment of any employee
due to the installation of labor-saving devices, redundancy,
retrenchment to prevent losses or the closing or cessation of
operations of the establishment or undertaking unless the
closing is for the purpose of circumventing the provisions of
this Title, by serving a written notice on the workers and the
Department of Labor and Employment at least one (1) month
before the intended date thereof. In case of termination due to
the installation of labor-saving devices or redundancy, the
worker affected thereby shall be entitled to a separation pay
equivalent to at least one (1) month pay or to at least one (1)
month pay for every year of service, whichever is higher. In
case of retrenchment to prevent losses and in cases of closure
or cessation of operations of establishment or undertaking not
due to serious business losses or financial reverses, the
separation pay shall be equivalent to at least one (1) month
pay or at least month pay for every year of service,
whichever is higher. A fraction of at least 6 months shall be
In the case at bar, we have only the bare assertion of petitioner
that, in abolishing the security section, private respondents
real purpose was to avoid payment to the security checkers of
the wage increases provided in the collective bargaining
agreement approved in 1990. Such an assertion is not a
5
proportionate 13th month pay. Petitioner filed a motion for reconsideration, but sufficient basis for concluding that the termination of
his motion was denied petitioners employment was not a bona fide decision of
management to obtain reasonable return from its investment,
Hence this petition. which is a right guaranteed to employers under the
Constitution.

The law also provides that to terminate the employment of an

employee for any of the authorized causes the employer must
serve "a written notice on the workers and the Department of
Labor and Employment at least 1 month before the intended
date thereof." In the case at bar, petitioner was given a notice
of termination on the same day, his services were terminated.
He was thus denied his right to be given written notice before
the termination of his employment, and the question is the
appropriate sanction for the violation of petitioners right.

The rule reversed a long standing policy theretofore followed

that even though the dismissal is based on a just cause or the
termination of employment is for an authorized cause, the
dismissal or termination is illegal if effected without notice to
the employee.

The court doesnt agree that disregard of this requirement by

an employer renders the dismissal or termination of
employment null and void. Such a stance is actually a
reversion to the discredited pre-Wenphil rule of ordering an
employee to be reinstated and paid backwages when it is
shown that he has not been given notice and hearing although
his dismissal or layoff is later found to be for a just or
authorized cause. Such rule was abandoned in Wenphil
because it is really unjust to require an employer to keep in his
service one who is guilty,

The Wenphil Doctrine Re-examined.

The termination of his employment should not be considered

void but he should simply be paid separation pay as provided
in Art. 283 in addition to backwages.

In cases of dismissal under Art. 282, the purpose for the

requirement of notice and hearing is not to comply with Due
Process Clause of the Constitution. The time for notice and
hearing is at the trial stage. Then that is the time we speak of
notice and hearing as the essence of procedural due process.
Thus, compliance by the employer with the notice requirement
before he dismisses an employee does not foreclose the right
of the latter to question the legality of his dismissal.

If an employee is laid off for any of the causes in Arts. 283-284,

i.e., installation of a labor-saving device, but the employer did
not give him and the DOLE a 30-day written notice of
termination in advance, then the termination of his employment
should be considered ineffectual and he should be paid
backwages.

The consequence of the failure either of the employer or the

employee to live up to this precept is to make him liable in
damages, not to render his act (dismissal or resignation, as the
case may be) void. The measure of damages is the amount of
wages the employee should have received were it not for the
termination of his employment without prior notice. If
warranted, nominal and moral damages may also be awarded.

6

AGABON VS. NLRC Virgilio and Jenny Agabon worked for respondent Riviera Home Improvements,
G.R. No. 158693 Inc. as gypsum and cornice installers from January 1992 until Feb 1999. Their
employment was terminated when they were dismissed for allegedly abandoning
their work. Petitioners Agabon then filed a case of illegal dismissal. The Labor
Arbiter ruled in favor of the spouses and ordered Riviera to pay them their
money claims. The NLRC reversed the Labor Arbiters decision, finding that the
Agabons were indeed guilty of abandonment.
AGABON DOCTRINE
The CA modified the Labor Arbiter by ruling that there was abandonment but
ordering Riviera to pay the Agabons money claims. The arguments of both
parties are as follows:
The Agabons claim, among others that Riviera violated the requirements of
notice and hearing when the latter did not send written letters of termination to
their addresses.
Riviera admitted to not sending the Agabons letters of termination to their last
known addresses because the same would be futile, as the Agabons do not
reside there anymore. However, it also claims that the Agabons abandoned their
work. More than once, they subcontracted installation works for other
companies. They already were warned of termination if the same act was
repeated, still, they disregarded the warning.
I I
Whether or not the Agabons were illegally dismissed
II
Whether Riviera violated the requirements of notice
and hearing
III
Whether or not the violation of the procedural
requirements of notice and hearing for termination of
employees is a violation of the Constitutional due
process
Given the nature of the violation, therefore, the appropriate
sanction for the failure to give notice is the payment of
backwages for the period when the employee is considered not
to have been effectively dismissed or his employment
terminated.
The resolution of the National Labor Relations Commission is
MODIFIED by ordering private respondent Isetann Department
Store, Inc. to pay petitioner separation pay equivalent to 1
month pay for every year of service, his unpaid salary, and his
proportionate 13th month pay and, in addition, full backwages
from the time his employment was terminated on October 11,
1991 up to the time the decision herein becomes final. For this
purpose, this case is REMANDED to the Labor Arbiter for
computation of the separation pay, backwages, and other
monetary awards to petitioner.
No. There was just cause for their dismissal, i.e.,
abandonment. Art. 282 specifies the grounds for just dismissal,
to wit:
a. Serious misconduct or willful disobedience of the lawful
orders of
the employer or his duly authorized representative in
connection
with the employees work
b. Gross and habitual neglect of the by the employee of his
duties
(includes abandonment)
c. Fraud or willful breach of the trust reposed by the employer
or his
duly authorized representative to the employee
d. Commission of a crime or offense by the employee against
the
person of the employer or any member of his immediate family
or
his duly authorized representative
e. Any other causes analogous to the foregoing.
To establish abandonment, two elements must be present:
a. The unjustified failure of the employee to report for work
b. A clear intention to sever employer-employee relationship,
manifested by overt acts.
Here, the Agabons were frequently absent from work for
having
performed installation work for another company, despite prior
warning given by Riviera. This clearly establishes an intention
to sever the employer-employee relationship between them,
and which constitutes abandonment.
II
Yes. While the employer has the right to expect good
performance,
diligence, good conduct and loyalty from its employees, it also
has the
duty to provide just compensation to his employees and to
observe the procedural requirements of notice and
hearing in the termination of his employees.
a. A written notice to the employee specifying the grounds for
termination and giving the employee reasonable opportunity to
be heard
b. A hearing where the employee is given the opportunity to
respond to the charges against him and present evidence or
rebut
7
the evidence presented against him.
c. A written notice of termination indicating that grounds have
been
established to justify his termination upon due consideration of
all circumstances

In this case, Riviera failed to notify the Agabons of their

termination to their last known addresses. Hence, they violated
the procedural requirement laid down by the law in the
termination of employees

III
No. Constitutional due process is that provided under the
Constitution, which involves the protection of the individual
against governmental oppression and the assurance of his
rights In civil, criminal and
administrative proceedings; statutory due process is that found
in the Labor Code and its Implementing Rules and protects the
individual from being unjustly terminated without just or
authorized cause after notice and hearing.

The two are similar in that they both have two aspects:
substantive due process and procedural due process.
However, they differ in that under the Labor Code, the first one
refers to the valid and authorized causes of employment
termination, while the second one refers to the manner
of dismissal. A denial of statutory due process is not the same
as a denial of Constitutional due process for reasons
enunciated in Serrano v. NLRC.

The dismissal is valid, but Riviera should pay nominal

damages to the Agabons in vindication of the latter for violating
their right to notice and hearing. The penalty is in the nature of
a penalty or indemnification, the amount dependent on the
facts of each case, including the nature of gravity of offense of
the employer

In this case, the Serrano doctrine was re-examined.

In the Serrano case, the dismissal was upheld, but it was held
to be ineffectual. Hence, Serrano was still entitled to the
payment of his backwages from the time of dismissal until the
promulgation of the court of the existence of an authorized
cause.

Further, he was entitled to his separation pay as mandated

under Art. 283. The ruling is unfair to employers and has the
danger of thefollowing consequences:
a. The encouragement of filing frivolous suits even by
notorious
employees who were justly dismissed but were deprived of
statutory due process; they are rewarded by invoking due
process
b. It would create absurd situations where there is just or
authorized cause but a procedural infirmity invalidates the
termination, ie an employee who became a criminal and
threatened his co-workers lives, who fled and could not be
found
c. It could discourage investments that would generate
employment in the economy

The payment of backwages is unjustified as only illegal

termination gives the employee the right to be paid full

8

JAKA VS. NLRC Respondents Darwin Pacot, Robert Parohinog, David Bisnar, Marlon
G.R. No. 150378 Domingo, Rhoel Lescano and Jonathan Cagabcab were earlier hired by
petitioner JAKA Foods Processing Corporation until the latter terminated their
employment because the corporation was in dire financial straits. It is not
disputed, however, that the termination was effected without JAKA complying
with the requirement under Article 283 of the Labor Code regarding the service
of a written notice upon the employees and the Department of Labor and
JAKA DOCTRINE Employment at least 1 month before the intended date of termination.
In time, respondents separately filed with the regional Arbitration Branch of the
NLRC complaints for illegal dismissal, underpayment of wages and nonpayment
of service incentive leave and 13th month pay against JAKA and its HRD
Manager, Rosana Castelo. After due proceedings, the Labor Arbiter rendered a
decision declaring the termination illegal and ordering JAKA and its HRD
Manager to reinstate respondents with full backwages, and separation pay if
reinstatement is not possible.
Therefrom, JAKA went on appeal to the NLRC, which, in a decision affirmed in
toto that of the Labor Arbiter. JAKA filed a motion for reconsideration. Acting
thereon, the NLRC came out with another decision this time modifying its earlier
decision it REVERSED and SET ASIDE and another one entered ordering
respondent JAKA Foods Processing Corporation to pay petitioners separation
pay equivalent to one (1) month salary, the proportionate 13 th month pay and, in
addition, full backwages from the time their employment was terminated on
August 29, 1997 up to the time the Decision herein becomes final.
This time, JAKA moved for a reconsideration but its motion was denied by the
appellate court
Hence, JAKAs present recourse, submitting, for our consideration.
Whether or not the court of appeals correctly awarded
full back wages and awarded separation pays to the
respondents.
abandonment, which is a form of a neglect of duty which, in
respondents dismissal, i.e., retrenchment, which is one of the
backwages.
When the dismissal is valid or upheld, the employee has no
right to
backwages
The very recent case of Agabon vs. NLRC, the court had the
opportunity to resolve a similar question. Therein, it was found
that the employees committed a grave offense, i.e.,
turn, is one of the just causes enumerated under Article 282 of
the Labor Code. In said case, the validity of the dismissal
despite non-compliance with the notice requirement of the
Labor Code was upheld.
The clear-cut distinction between a dismissal for just cause
under Article 282 and a dismissal for authorized cause under
Article 283 is further reinforced by the fact that in the first,
payment of separation pay, as a rule, is not required, while in
the second, the law requires payment of separation pay.
For these reasons, there ought to be a difference in treatment
when the ground for dismissal is one of the just causes under
Article 282, and when based on one of the authorized causes
under Article 283.
On another breath, a dismissal for an authorized cause under
Article 283 does not necessarily imply delinquency or
culpability on the part of the employee. Instead, the dismissal
process is initiated by the employers exercise of his
management prerogative, i.e. when the employer opts to install
labor saving devices, when he decides to cease business
operations or when, as in this case, he undertakes to
implement a retrenchment program.
It is, therefore, established that there was ground for
authorized causes enumerated under Article 283 of the Labor
Code. Likewise, it is established that JAKA failed to comply
with the notice requirement under the same Article.
Considering the factual circumstances in the instant case and
the above ratiocination, it was therefore, deem it proper to fix
the indemnity at P50,000.00.
The Court of Appeals to have been in error when it ordered
JAKA to pay respondents separation pay equivalent to 1-
month salary for every year of service.
The rule, therefore, is that in all cases of business closure or
cessation of operation or undertaking of the employer, the
affected employee is entitled to separation pay. This is
consistent with the state policy of treating labor as a primary
social economic force, affording full protection to its rights as
well as its welfare. The exception is when the closure of
business or cessation of operations is due to serious
business losses or financial reverses; duly proved, in
which case, the right of affected employees to separation
pay is lost for obvious reasons.
Resolution of the Court of Appeals are hereby SET ASIDE and
a new one entered upholding the legality of the dismissal but
ordering petitioner to pay each of the respondents the amount
of P50,000.00, representing nominal damages for non-
compliance with statutory due process.