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EN BANC

G.R. No. 117040 January 27, 2000

RUBEN SERRANO, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and ISETANN DEPARTMENT STORE, respondents.

MENDOZA, J.:

This is a Petition seeking review of the resolutions, dated March 30, 1994 and August 26, 1994, of the National
Labor Relations Commission (NLRC) which reversed the decision of the Labor Arbiter and dismissed petitioner
Ruben Serrano's complaint for illegal dismissal and denied his motion for reconsideration. The facts are as follows:

Petitioner was hired by private respondent Isetann Department Store as a security checker to apprehend shoplifters
and prevent pilferage of merchandise.1 Initially hired on October 4, 1984 on contractual basis, petitioner eventually
became a regular employee on April 4, 1985. In 1988, he became head of the Security Checkers Section of private
respondent.2

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. For this reason, it wrote petitioner the following
memorandum:3

October 11, 1991

MR. RUBEN SERRANO

PRESENT

Dear Mr. Seranno,

In view of the retrenchment program of the company, we hereby reiterate our verbal notice to
you of your termination as Security Section Head effective October 11, 1991.

Please secure your clearance from this ofce.

Very truly yours,

[Sgd.] TERESITA A. VILLANUEVA

Human Resources Division Manager

The loss of his employment prompted petitioner to le a complaint on December 3, 1991 for illegal dismissal,
illegal layoff, unfair labor practice, underpayment of wages, and nonpayment of salary and overtime pay.4

The parties were required to submit their position papers, on the basis of which the Labor Arbiter dened the
issues as follows:5

Whether or not there is a valid ground for the dismissal of the complainant.

Whether or not complainant is entitled to his monetary claims for underpayment of wages, nonpayment of
salaries, 13th month pay for 1991 and overtime pay.

Whether or not Respondent is guilty of unfair labor practice.

Thereafter, the case was heard. On April 30, 1993, the Labor Arbiter rendered a decision nding 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 inefcient so as to justify their replacement by a security agency, or that "cost-saving devices [such
as] secret video cameras (to monitor and prevent shoplifting) and secret code tags on the merchandise" could not
have been employed; instead, the day after petitioner's dismissal, private respondent employed a safety and
security supervisor with duties and functions similar to those of petitioner.1wphi1.nt

Accordingly, the Labor Arbiter ordered:6

WHEREFORE, above premises considered, judgment is hereby decreed:

(a) Finding the dismissal of the complainant to be illegal and concomitantly, Respondent is ordered to pay
complainant full backwages without qualication or deduction in the amount of P74,740.00 from the time of
his dismissal until reinstatement. (computed till promulgation only) based on his monthly salary of
P4,040.00/month at the time of his termination but limited to (3) three years;

(b) Ordering the Respondent to immediately reinstate the complainant to his former position as security
section head or to a reasonably equivalent supervisorial position in charges of security without loss of
seniority rights, privileges and benets. This order is immediately executory even pending appeal;

(c) Ordering the Respondent to pay complainant unpaid wages in the amount of P2,020.73 and proportionate
13th month pay in the amount of P3,198.30;

(d) Ordering the Respondent to pay complainant the amount of P7,995.91, representing 10% attorney's fees
based on the total judgment award of P79,959.12.

All other claims of the complainant whether monetary or otherwise is hereby dismissed for lack of merit.

SO ORDERED.

Private respondent appealed to the NLRC which, in its resolution of March 30, 1994; 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 proportionate 13th month pay. Petitioner led a motion for reconsideration, but his
motion was denied.

The NLRC held that the phase-out of private respondent's security section and the hiring of an independent security
agency constituted an exercise by private respondent of "[a] legitimate business decision whose wisdom we do not
intend to inquire into and for which we cannot substitute our judgment"; that the distinction made by the Labor
Arbiter between "retrenchment" and the employment of cost-saving devices" under Art. 283 of the Labor Code was
insignicant because the company ofcial who wrote the dismissal letter apparently used the term "retrenchment"
in its "plain and ordinary sense: to layoff or remove from one's job, regardless of the reason therefor"; that the rule
of "reasonable criteria" in the selection of the employees to be retrenched did not apply because all positions in the
security section had been abolished; and that the appointment of a safety and security supervisor referred to by
petitioner to prove bad faith on private respondent's part was of no moment because the position had long been in
existence and was separate from petitioner's position as head of the Security Checkers Section.

Hence this petition. Petitioner raises the following issue:

IS THE HIRING OF AN INDEPENDENT SECURITY AGENCY BY THE PRIVATE RESPONDENT TO REPLACE ITS
CURRENT SECURITY SECTION A VALID GROUND FOR THE DISMISSAL OF THE EMPLOYEES CLASSED
UNDER THE LATTER?7

Petitioner contends that abolition of private respondent's Security Checkers Section and the employment of an
independent security agency do not fall under any of the authorized causes for dismissal under Art. 283 of the
Labor Code.

Petitioner Laid Off for Cause

Petitioner's contention has no merit. 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 nancial reverses, the separation pay shall be
equivalent to at least one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is
higher. A fraction of at least six (6) months shall be considered as one (1) whole year.
In De Ocampo v. National Labor Relations Commission,8 this Court upheld the termination of employment of three
mechanics in a transportation company and their replacement by a company rendering maintenance and repair
services. It held:

In contracting the services of Gemac Machineries, as part of the company's cost-saving program, the
services rendered by the mechanics became redundant and superfluous, and therefore properly terminable.
The company merely exercised its business judgment or management prerogative. And in the absence of
any proof that the management abused its discretion or acted in a malicious or arbitrary manner, the court
will not interfere with the exercise of such prerogative.9

In Asian Alcohol Corporation v. National Labor Relations Commission,10 the Court likewise upheld the termination of
employment of water pump tenders and their replacement by independent contractors. It ruled that an employer's
good faith in implementing a redundancy program is not necessarily put in doubt by the availment of the services
of an independent contractor to replace the services of the terminated employees to promote economy and
efciency.

Indeed, as we pointed out in another case, the "[management of a company] cannot be denied the faculty of
promoting efciency and attaining economy by a study of what units are essential for its operation. To it belongs
the ultimate determination of whether services should be performed by its personnel or contracted to outside
agencies . . . [While there] should be mutual consultation, eventually deference is to be paid to what management
decides."11 Consequently, absent proof that management acted in a malicious or arbitrary manner, the Court will not
interfere with the exercise of judgment by an employer.12

In the case at bar, we have only the bare assertion of petitioner that, in abolishing the security section, private
respondent's real purpose was to avoid payment to the security checkers of the wage increases provided in the
collective bargaining agreement approved in 1990.13 Such an assertion is not sufcient basis for concluding that
the termination of petitioner's employment was not a bona de decision of management to obtain reasonable
return from its investment, which is a right guaranteed to employers under the Constitution.14 Indeed, that the
phase-out of the security section constituted a "legitimate business decision" is a factual nding of an
administrative agency which must be accorded respect and even nality by this Court since nothing can be found
in the record which fairly detracts from such nding.15

Accordingly, we hold that the termination of petitioner's services was for an authorized cause, i.e., redundancy.
Hence, pursuant to Art. 283 of the Labor Code, petitioner should be given separation pay at the rate of one month
pay for every year of service.

Sanctions for Violations of the Notice Requirement

Art. 283 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 one (1)
month before the intended date thereof." In the case at bar, petitioner was given a notice of termination on October
11, 1991. 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
petitioner's right.

To be sure, this is not the rst time this question has arisen. In Subuguero v. NLRC,16 workers in a garment factory
were temporarily laid off due to the cancellation of orders and a garment embargo. The Labor Arbiter found that the
workers had been illegally dismissed and ordered the company to pay separation pay and backwages. The NLRC,
on the other hand, found that this was a case of retrenchment due to business losses and ordered the payment of
separation pay without backwages. This Court sustained the NLRC's nding. However, as the company did not
comply with the 30-day written notice in Art. 283 of the Labor Code, the Court ordered the employer to pay the
workers P2,000.00 each as indemnity.

The decision followed the ruling in several cases involving dismissals which, although based on any of the just
causes under Art. 282,17 were effected without notice and hearing to the employee as required by the implementing
rules.18 As this Court said: "It is now settled that where the dismissal of one employee is in fact for a just and valid
cause and is so proven to be but he is not accorded his right to due process, i.e., he was not furnished the twin
requirements of notice and opportunity to be heard, the dismissal shall be upheld but the employer must be
sanctioned for non-compliance with the requirements of, or for failure to observe, due process."19

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 shift in doctrine took place in 1989 in Wenphil Corp. v. NLRC.20 In announcing
the change, this Court said:21

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 three (3) years without qualication or deduction, when it appears he was not afforded due
process, although his dismissal was found to be for just and authorized cause in an appropriate proceeding
in the Ministry of Labor and Employment, should be re-examined. It will be highly prejudicial to the interests
of the employer to impose on him the services of an employee who has been shown to be guilty of the
charges that warranted his dismissal from employment. Indeed, it will demoralize the rank and le if the
undeserving, if not undesirable, remains in the service.
 xxxxxxxxx

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.

The nes imposed for violations of the notice requirement have varied from P1,000.0022 to P2,000.0023 to
P5,000.0024 to P10,000.00.25

Need for Reexamining the Wenphil Doctrine

Today, we once again consider the question of appropriate sanctions for violations of the notice experience during
the last decade or so with the Wenphil doctrine. The number of cases involving dismissals without the requisite
notice to the employee, although effected for just or authorized causes, suggest that the imposition of ne for
violation of the notice requirement has not been effective in deterring violations of the notice requirement. Justice
Panganiban nds the monetary sanctions "too insignicant, too niggardly, and sometimes even too late." On the
other hand, Justice Puno says there has in effect been fostered a policy of "dismiss now; pay later" which moneyed
employers nd more convenient to comply with than the requirement to serve a 30-day written notice (in the case of
termination of employment for an authorized cause under Arts. 283-284) or to give notice and hearing (in the case
of dismissals for just causes under Art. 282).

For this reason, they regard any dismissal or layoff without the requisite notice to be null and void even though
there are just or authorized cause for such dismissal or layoff. Consequently, in their view, the employee concerned
should be reinstated and paid backwages.

Validity of Petitioner's Layoff Not Affected by Lack of Notice

We agree with our esteemed colleagues, Justices Puno and Panganiban, that we should rethink the sanction of ne
for an employer's disregard of the notice requirement. We do not agree, however, 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, for example, of an attempt on the life of the employer or the latter's family, or
when the employer is precisely retrenching in order to prevent losses.

The need is for a rule which, while recognizing the employee's right to notice before he is dismissed or laid off, at
the same time acknowledges the right of the employer to dismiss for any of the just causes enumerated in Art. 282
or to terminate employment for any of the authorized causes mentioned in Arts. 283-284. If the Wenphil rule
imposing a ne on an employer who is found to have dismissed an employee for cause without prior notice is
deemed ineffective in deterring employer violations of the notice requirement, the remedy is not to declare the
dismissal void if there are just or valid grounds for such dismissal or if the termination is for an authorized cause.
That would be to uphold the right of the employee but deny the right of the employer to dismiss for cause. Rather,
the remedy is to order the payment to the employee of full backwages from the time of his dismissal until the court
nds that the dismissal was for a just cause. But, otherwise, his dismissal must be upheld and he should not be
reinstated. This is because his dismissal is ineffectual.

For the same reason, 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.
However, 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.

Justice Puno argues that an employer's failure to comply with the notice requirement constitutes a denial of the
employee's right to due process. Prescinding from this premise, he quotes the statement of Chief Justice
Concepcion Vda. de Cuaycong v. Vda. de Sengbengco26 that "acts of Congress, as well as of the Executive, can deny
due process only under the pain of nullity, and judicial proceedings suffering from the same flaw are subject to the
same sanction, any statutory provision to the contrary notwithstanding." Justice Puno concludes that the dismissal
of an employee without notice and hearing, even if for a just cause, as provided in Art. 282, or for an authorized
cause, as provided in Arts. 283-284, is a nullity. Hence, even if just or authorized cause exist, the employee should
be reinstated with full back pay. On the other hand, Justice Panganiban quotes from the statement in People v.
Bocar27 that "[w]here the denial of the fundamental right of due process is apparent, a decision rendered in
disregard of that right is void for lack of jurisdiction."

Violation of Notice Requirement Not a Denial of Due Process

The cases cited by both Justices Puno and Panganiban refer, however, to the denial of due process by the State,
which is not the case here. There are three reasons why, on the other hand, violation by the employer of the notice
requirement cannot be considered a denial of due process resulting in the nullity of the employee's dismissal or
layoff.

The rst is that the Due Process Clause of the Constitution is a limitation on governmental powers. It does not
apply to the exercise of private power, such as the termination of employment under the Labor Code. This is plain
from the text of Art. III, 1 of the Constitution, viz.: "No person shall be deprived of life, liberty, or property without
due process of law. . . ." The reason is simple: Only the State has authority to take the life, liberty, or property of the
individual. The purpose of the Due Process Clause is to ensure that the exercise of this power is consistent with
what are considered civilized methods.

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

Even in cases of dismissal under Art. 282, the purpose for the requirement of notice and hearing is not to comply
with Due Process Clause of the Constitution. The time for notice and hearing is at the trial stage. Then that is the
time we speak of notice and hearing as the essence of procedural due process. Thus, compliance by the employer
with the notice requirement before he dismisses an employee does not foreclose the right of the latter to question
the legality of his dismissal. As Art. 277(b) provides, "Any decision taken by the employer shall be without prejudice
to the right of the worker to contest the validity or legality of his dismissal by ling a complaint with the regional
branch of the National Labor Relations Commission."

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.28 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 or the payment of
compensation at the rate of one-half month for every year of service.29

The Termination Pay Law was held not to be a substantive law but a regulatory measure, the purpose of which was
to give the employer the opportunity to nd a replacement or substitute, and the employee the equal opportunity to
look for another job or source of employment. Where the termination of employment was for a just cause, no notice
was required to be given to the, employee.30 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. It cannot be that the former regime denied due process to the employee. Otherwise, there
should now likewise be a rule that, in case an employee leaves his job without cause and without prior notice to his
employer, his act should be void instead of simply making him liable for damages.

The third reason why the notice requirement under Art. 283 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).

Justice Puno disputes this. He says that "statistics in the DOLE will prove that many cases have been won by
employees before the grievance committees manned by impartial judges of the company." The grievance
machinery is, however, different because it is established by agreement of the employer and the employees and
composed of representatives from both sides. That is why, in Batangas Laguna Tayabas Bus Co. v. Court of Appeals,31
which Justice Puno cites, it was held that "Since the right of [an employee] to his labor is in itself a property and
that the labor agreement between him and [his employer] is the law between the parties, his summary and arbitrary
dismissal amounted to deprivation of his property without due process of law." But here we are dealing with
dismissals and layoffs by employers alone, without the intervention of any grievance machinery. Accordingly in
Montemayor v. Araneta University Foundation,32 although a professor was dismissed without a hearing by his
university, his dismissal for having made homosexual advances on a student was sustained, it appearing that in the
NLRC, the employee was fully heard in his defense.

Lack of Notice Only Makes Termination Ineffectual

Not all notice requirements are requirements of due process. Some are simply part of a procedure to be followed
before a right granted to a party can be exercised. Others are simply an application of the Justinian precept,
embodied in the Civil Code,33 to act with justice, give everyone his due, and observe honesty and good faith toward
one's fellowmen. Such is the notice requirement in Arts. 282-283. The consequence of the failure either of the
employer or the employee to live up to this precept is to make him liable in damages, not to render his act
(dismissal or resignation, as the case may be) void. The measure of damages is the amount of wages the employee
should have received were it not for the termination of his employment without prior notice. If warranted, nominal
and moral damages may also be awarded.

We hold, therefore, that, with respect to Art. 283 of the Labor Code, 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. It is similar to the
failure to observe the provisions of Art. 1592, in relation to Art. 1191, of the Civil Code34 in rescinding a contract for
the sale of immovable property. Under these provisions, while the power of a party to rescind a contract is implied
in reciprocal obligations, nonetheless, in cases involving the sale of immovable property, the vendor cannot
exercise this power even though the vendee defaults in the payment of the price, except by bringing an action in
court or giving notice of rescission by means of a notarial demand.35 Consequently, a notice of rescission given in
the letter of an attorney has no legal effect, and the vendee can make payment even after the due date since no
valid notice of rescission has been given.36

Indeed, under the Labor Code, only the absence of a just cause for the termination of employment can make the
dismissal of an employee illegal. This is clear from Art. 279 which provides:

Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an
employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benets or their monetary equivalent computed from
the time his compensation was withheld from him up to the time of his actual reinstatement.37

Thus, only if the termination of employment is not for any of the causes provided by law is it illegal and, therefore,
the employee should be reinstated and paid backwages. To contend, as Justices Puno and Panganiban do, that
even if the termination is for a just or authorized cause the employee concerned should be reinstated and paid
backwages would be to amend Art. 279 by adding another ground for considering a dismissal illegal. What is more,
it would ignore the fact that under Art. 285, if it is the employee who fails to give a written notice to the employer
that he is leaving the service of the latter, at least one month in advance, his failure to comply with the legal
requirement does not result in making his resignation void but only in making him liable for damages.38 This
disparity in legal treatment, which would result from the adoption of the theory of the minority cannot simply be
explained by invoking resident Ramon Magsaysay's motto that "he who has less in life should have more in law."
That would be a misapplication of this noble phrase originally from Professor Thomas Reed Powell of the Harvard
Law School.

Justice Panganiban cites Pepsi-Cola Bottling Co. v. NLRC,39 in support of his view that an illegal dismissal results not
only from want of legal cause but also from the failure to observe "due process." The Pepsi-Cola case actually
involved a dismissal for an alleged loss of trust and condence which, as found by the Court, was not proven. The
dismissal was, therefore, illegal, not because there was a denial of due process, but because the dismissal was
without cause. The statement that the failure of management to comply with the notice requirement "taints the
dismissal with illegality" was merely a dictum thrown in as additional grounds for holding the dismissal to be
illegal.

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 sanction is not the payment alone of nominal damages as Justice Vitug contends.

Unjust Results of Considering Dismissals/Layoffs Without Prior Notice As Illegal

The refusal to look beyond the validity of the initial action taken by the employer to terminate employment either for
an authorized or just cause can result in an injustice to the employer. For not giving notice and hearing before
dismissing an employee, who is otherwise guilty of, say, theft, or even of an attempt against the life of the employer,
an employer will be forced to keep in his employ such guilty employee. This is unjust.

It is true the Constitution regards labor as "a primary social economic force."40 But so does it declare that it
"recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to
needed investment."41 The Constitution bids the State to "afford full protection to labor."42 But it is equally true that
"the law, in protecting the right's of the laborer, authorizes neither oppression nor self-destruction of the employer."43
And it is oppression to compel the employer to continue in employment one who is guilty or to force the employer
to remain in operation when it is not economically in his interest to do so.

In sum, we hold that if in proceedings for reinstatement under Art. 283, it is shown that the termination of
employment was due to an authorized cause, then the employee concerned should not be ordered reinstated even
though there is failure to comply with the 30-day notice requirement. Instead, he must be granted separation pay in
accordance with Art. 283, to wit:

In case of termination due to the installation of labor-saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one
month for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases
of closures or cessation of operations of establishment or undertaking not due to serious business losses or
nancial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2)
month pay for every year of service, whichever is higher. A fraction of at least six months shall be considered
one (1) whole year.
If the employee's separation is without cause, instead of being given separation pay, he should be reinstated. In
either case, whether he is reinstated or only granted separation pay, he should be paid full backwages if he has
been laid off without written notice at least 30 days in advance.

On the other hand, with respect to dismissals for cause under Art. 282, if it is shown that the employee was
dismissed for any of the just causes mentioned in said Art. 282, then, in accordance with that article, he should not
be reinstated. However, he must be paid backwages from the time his employment was terminated until it is
determined that the termination of employment is for a just cause because the failure to hear him before he is
dismissed renders the termination of his employment without legal effect.

WHEREFORE, the petition is GRANTED and 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 one (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 nal. For this purpose, this case is REMANDED to the Labor Arbiter for computation of the separation pay,
backwages, and other monetary awards to petitioner.

SO ORDERED.

Davide, Jr., C.J., Melo, Kapunan, Quisumbing, Purisima, Pardo, Buena, Gonzaga-Reyes and De Leon, Jr., JJ., concur.
Bellosillo J., Please see Separate Opinion.
Puno, J., Please see Dissenting Opinion.
Vitug, J., Please see Separate opinion.
Panganiban J., Please see Separate Opinion.
Ynares-Santiago, J., I join the dissenting opinion of J. Puno.

Separate Opinions

BELLOSILLO, J., separate opinion;

We point out at the outset that this Petition for Review which was led before the promulgation of St. Martin Funeral
Home v. National Labor Relations Commission,1 is not the proper means by which NLRC decisions are appealed to
this Court. Before St. Martin Funeral Home, it was only through a Petition for Certiorari under Rule 65 that NLRC
decisions could be reviewed and nullied by us on the ground of lack of jurisdiction or grave abuse of discretion
amounting to lack or excess of jurisdiction. After St. Martin Funeral Home, petitions like the one at bar are initially
led in the Court of Appeals for proper adjudication.

In the interest of justice, however, and in order to write nis to the instant case which has already dragged on for so
long, we shall treat the petition pro hac vice as one for certiorari under Rule 65 although it is captioned Petition for
Review on Certiorari; after all, it was led within the reglementary period for the ling of a petition for certiorari under
Rule 65.

Briefly, on 4 April 1985 private respondent Isetann Department Store, Inc. (ISETANN), employed petitioner Ruben
Serrano as Security Checker until his appointment as Security Section Head. On October 1991 ISETANN through its
Human Resource Division Manager Teresita A. Villanueva sent Serrano a memorandum terminating his
employment effective immediately "in view of the retrenchment program of the company," and directing him to
secure clearance from their ofce.2

Petitioner Serrano led with the NLRC Adjudication Ofce a complaint for illegal dismissal and underpayment of
wages against ISETANN. Efforts at amicable settlement proved futile. Ms. Cristina Ramos, Personnel
Administration Manager of ISETANN, testied that the security checkers and their section head were retrenched
due to the installation of a labor saving device, i.e., the hiring of an independent security agency.

Finding the dismissal to be illegal, the Labor Arbiter ordered the immediate reinstatement of Serrano to his former
or to an equivalent position plus payment of back wages, unpaid wages, 13th month pay and attorney's fees.

On appeal the NLRC reversed the Labor Arbiter and ruled that ISETANN acted within its prerogative when it phased
out its Security Section and retained the services of an independent security agency in order to cut costs and
economize. Upon denial of his motion for reconsideration3 Serrano led the instant petition imputing grave abuse
of discretion on the part of the NLRC.

Art. 282 of the Labor Code enumerates the just causes for the termination of employment by the employer: (a)
serious misconduct or willful disobedience by the employee of the lawful orders of his employer or the latter's
representative in connection with the employee's work; (b) gross and habitual neglect by the employee of his
duties; (c) fraud or willful breach by the employee of the trust reposed in him by his employer or his duly authorized
representative; (d) commission of a crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representative; and, (e) other causes analogous to the
foregoing.
On the other hand, Arts. 283 and 284 of the same Code enumerate the so-called authorized causes: (a) installation
of labor saving devices; (b) redundancy: (b) retrenchment to prevent losses; (d) closure or cessation of the
establishment or undertaking unless the closure or cessation is for the purpose of circumventing the provisions of
the law; and, (e) disease.

The Just causes enumerated under Art. 282 of the Labor Code are provided by the employee who causes the
infraction. The authorized causes are provided by the employer either because of outside factors such as the
general decline in the economy or merely part of its long range plan for business protability. Corollarily, in
termination for a just cause, the employee is not entitled to separation pay unlike in termination for an authorized
cause. In addition, the basis in computing the amount of separation pay varies depending on whether the
termination is due to the installation of a labor saving device, or redundancy, in which case, the employee is entitled
to receive separation pay equivalent to at least one (1) month pay or to at least one (1) month pay for every year of
service. In case the termination is due to retrenchment in order to prevent losses or in case of closure or cessation
of operation of the establishment or undertaking not due to serious business losses or nancial reverses, the
separation pay is lower, i.e., equivalent to one (1) month pay or at least one-half month pay for every year of service,
whichever is higher. As may be gleaned from the foregoing, where the cause of termination is for the nancial
advantage or benet of the employer, the basis in computing for separation pay is higher compared to termination
dictated by necessity with no appreciable nancial advantage to the employer.

In the instant case, we agree with the NLRC that the dismissal of petitioner Serrano was for an authorized cause,
i.e., redundancy, which exists where the services of an employee are in excess of what are reasonably demanded
by the actual requirements of the enterprise. A position is redundant where it is superfluous, and the superfluity
may be the outcome of other factors such as overhiring of workers, decreased volume of other business, or
dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise.4

The hiring of an independent security agency is a business decision properly within the exercise of management
prerogative. As such, this Court is denied the authority to delve into its wisdom although it is equipped with the
power to determine whether the exercise of such prerogative is in accordance with law. Consequently, the wisdom
or soundness of the management decision is not subject to the discretionary review of the Labor Arbiter nor of the
NLRC unless there is a violation of law or arbitrariness in the exercise thereof, in which case, this Court will step in.5
Specically, we held in International Harvester Macleod, Inc. v. Intermediate Appellate Court6 that the determination of
whether to maintain or phase out an entire department or section or to reduce personnel lies with management.
The determination of the need for the phasing out of a department as a labor and cost saving device because it is
no longer economical to retain its services is a management prerogative.

After having established that the termination of petitioner Ruben Serrano was for an authorized cause, we now
address the issue of whether proper procedures were observed in his dismissal.

Since the State affords protection to labor under the Constitution,7 workers enjoy security of tenure and may only be
removed or terminated upon valid reason and through strict observance of proper procedure.8 Article 279 of the
Labor Code specically provides

Art. 279. Security of Tenure. In cases of regular employment, the employer shall not terminate the services
of an employee except for a just cause or when authorized by this Title. An employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and to his other benets or their monetary equivalent
computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

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

Subject then to the constitutional right of workers to security of tenure and to be protected against dismissal except
for a just or authorized cause, and without prejudice to the requirement of notice under Art. 283 of the Labor Code,
the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a
statement of the cause of termination and shall afford the latter ample opportunity to be heard and to defend
himself with the assistance of his representative, if he so desires, in accordance with company rules and
regulations promulgated pursuant to guidelines set by the DOLE.10

As specically provided in Art. 283 of the Labor Code, the employer may terminate the employment of any
employee due to redundancy by serving a written notice on the worker and the DOLE at least one (1) month before
the intended date thereof. In the instant case, ISETANN clearly violated the provisions of Art. 283 on notice.11 It did
not send a written notice to DOLE which is essential because the right to terminate an employee is not an absolute
prerogative. The lack of written notice denied DOLE the opportunity to determine the validity of the termination.

The written notice ISETANN sent to Serrano was dated 11 October 1991 or on the same day the intended
termination was to take effect. This obviously did not comply with the 30-day mandatory requirement. Although the
cause for discharge may be just or authorized, it is still necessary and obligatory to afford the employee concerned
his basic and more important right to notice. Serrano was not given the chance to make the needed adjustments
brought about by his termination. Signicantly, the notice is intended to enable the employee not only to prepare
himself for the legal battle to protect his tenure of employment, which can be long, arduous, expensive and
complicated by his own standards, but also to nd other means of employment and ease the impact of the loss of
his job and, necessarily, has income.

We are of the view that failure to send notice of termination to Serrano is not tantamount to violation of his
constitutional right to due process but merely constitutes non-compliance with the provision on notice under Art.
283 of the Labor Code.

The legitimacy of a government is established and its functions delineated in the Constitution. From the
Constitution flows all the powers of government in the same manner that it sets the limits for their proper exercise.
In particular, the Bill of Rights functions primarily as a deterrent to any display of arbitrariness on the part of the
government or any of its instrumentalities. It serves as the general safeguard, as is apparent in its rst section
which states, "No person shall be deprived of life, liberty or property without due process of law, nor shall any
person be denied the equal protection of the laws."12 Specically, due process is a requirement for the validity of any
governmental action amounting to deprivation of liberty.13 It is a restraint on state action not only in terms of what it
amounts to but how it is accomplished. Its range thus covers both the ends sough to be achieved by ofcialdom as
well as the means for their realization.14

Substantive due process is a weapon that may be utilized to challenge acts of the legislative body, whether national
or local, and presumably executive orders of the President and administrative orders and regulations of a rule-
making character. Procedural due process, on the other hand, is available for the purpose of assailing arbitrariness
or unreasonableness in the administration of the law by executive department or the judicial branch. Procedural
due process likewise may aid those appearing before Congressional committees if the proceedings are arbitrary or
otherwise unfair.13

Procedural due process demands that governmental acts, more specically so in the case of the judiciary, not be
affected with arbitrariness.16 The same disinterestedness required of men on the bench must characterize the
actuations of public ofcials, not excluding the President, to satisfy the requirements of procedural due process.17

In his dissent Mr. Justice Puno states that "the new majority opinion limiting violations of due process to
government action alone is a throwback to a regime of law long discarded by more progressive countries." He
opines that "today, private due process is a settled norm in administrative law," citing Schwartz, an authority in
administrative law.

We beg to disagree. A careful reading of Schwartz would reveal that requirements of procedural due process
extended from governmental to private action only in instances where there is "sufcient governmental
involvement" or "the private action was so saturated with governmental incidents."

The cardinal primary requirements of due process in administrative proceedings were highlighted in Ang Tibay v.
Court of Industrial Relations:18 (a) the right to a hearing, which includes the right to present one's case and submit
evidence in support thereof; (b) the tribunal must consider the evidence presented; (c) the decision must have
something to support itself; (d) the evidence must be substantial; (e) the decision must be based on the evidence
presented at the hearing, or at least contained in the record and disclosed to the parties affected; (f) the tribunal or
body or any of its judges must act on its own independent consideration of the law and facts of the controversy,
and not simply accept the views of a subordinate; (g) the board or body should, in all controversial questions,
render its decision in such manner that the parties to the proceeding may know the various issues involved, and the
reason for the decision rendered.

Also in Lumiqued v. Exevea19 it was held

In administrative proceedings, the essence of due process is simply the opportunity to explain one's side.
One may be heard, not solely by verbal presentation but also, and perhaps even more creditably as it is more
practicable than oral arguments, through pleadings. An actual hearing is not always an indispensable aspect
of due process. As long as a party was given the opportunity to defend his interests in due course, he cannot
be said to have been denied due process of law, for this opportunity to be heard is the very essence of due
process.

From the foregoing, it is clear that the observance of due process is demanded in governmental acts. Particularly in
administrative proceedings, due process starts with the tribunal or hearing ofcer and not with the employer. In the
instant case, what is mandated of the employer to observe is the 30-day notice requirement. Hence, non-
observance of the notice requirement is not denial of due process but merely a failure to comply with a legal
obligation for which we strongly recommend, we impose a disturbance compensation as discussed hereunder.

In the instant case, we categorically declare that Serrano was not denied his right to due process. Instead, his
employer did not comply with the 30-day notice requirement. However, while Serrano was not given the required 30-
day notice, he was nevertheless given and, in fact, took advantage of every opportunity to be heard, rst, by the
Labor Arbiter, second, by the NLRC, and third, by no less than this Court. Before the Labor Arbiter and the NLRC,
petitioner had the opportunity to present his side not only orally but likewise through proper pleadings and position
papers.

It is not correct therefore to say that petitioner was deprived of his right to due process.

We have consistently upheld in the past as valid although irregular the dismissal of an employee for a just or
authorized cause but without notice and have imposed a sanction on the erring employers in the form of damages for
their failure to comply with the notice requirement. We discussed the rationale behind this ruling in Wenphil
Corporation v. NLRC20 thus

The Court holds that the policy of ordering reinstatement to the service of an employee without loss of
seniority and the payment of his wages during the period of his separation until his actual reinstatement but
not exceeding three years without qualication or deduction, when it appears he was not afforded due
process, although his dismissal was found to be for just and authorized cause in an appropriate proceeding
in the Ministry of Labor and Employment should be re-examined. It will be highly prejudicial to the interests of
the employer to impose on him the services of an employee who has been shown to be guilty of the charges that
warranted his dismissal from employment. Indeed, it will demoralize the rank and le if the undeserving, if not
undesirable, remains in the service . . . . However, the petitioner must nevertheless be held to account for
failure to extend to private respondent his right to an investigation before causing his dismissal. The rule is
explicit as above discussed. The dismissal of an employee must be for just or authorized cause and after
due process. Petitioner committed an infraction of the second requirement. Thus, it must be imposed a
sanction for its failure to give a formal notice and conduct an investigation as required by law before
dismissing petitioner from employment. Considering the circumstances of this case petitioner must
indemnify private respondent the amount of P1,000.00. The measure of this award depends on the facts of
each case and the gravity of the omission committed by the employer (emphasis supplied).

In Sebuguero v. National Labor Relations Commission21 Mr. Justice Davide Jr., now Chief Justice, made this clear
pronouncement

It is now settled that where the dismissal of an employee is in fact for a just and valid cause and is so proven
to be but he is not accorded his right to due process, i.e. he was not furnished the twin requirements of notice
and the opportunity to be heard, the dismissal shall be upheld but the employer must be sanctioned for non-
compliance with the requirements of or for failure to observe due process. The sanction, in the nature of
indemnication or penalty, depends on the facts of each case and the gravity of the omission committed by
the employer.

This ruling was later ably amplied by Mr. Justice Puno in Nath v. National Labor Relations Commission22 where he
wrote

The rules require the employer to furnish the worker sought to be dismissed with two written notices before
termination of employment can be legally effected: (1) notice which apprises the employee of the particular
acts or omissions for which his dismissal is sought; and (2) the subsequent notice which informs the
employee of the employer's decision to dismiss him. In the instant case, private respondents have failed to
furnish petitioner with the rst of the required two (2) notices and to state plainly the reasons for the
dismissal in the termination letter. Failure to comply with the requirements taints the dismissal with illegality.

Be that as it may, private respondent can dismiss petitioner for just cause . . . . We afrm the nding of the public
respondent that there was just cause to dismiss petitioner, a probationary employee (emphasis supplied).

Also, in Camua v. National Labor Relations Commission23 this Court through Mr. Justice Mendoza decreed

In the case at bar, both the Labor Arbiter and the NLRC found that no written notice of the charges had been
given to petitioner by the respondent company. . . . Accordingly, in accordance with the well-settled rule,
private respondents should pay petitioner P1,000.00 as indemnity for violation of his right to due process . . .
. Although an employee validy dismissed for cause he may nevertheless be given separation pay as a measure
of social justice provided the cause is not serious misconduct reflecting on his moral character (emphasis
supplied).

Non-observance of this procedural requirement before would cause the employer to be penalized by way of paying
damages to the employee the amounts of which fluctuated through the years. Thus, for just cause the indemnity
ranged from P1,000.00 to P10,000.00.24 For authorized cause, as distinguished from just cause, the award ranged
from P2,000.00 to P5,000.00.25

This Court has also sanctioned the ruling that a dismissal for a just or authorized cause but without observance of
the mandatory 30-day notice requirement was valid although considered irregular. The Court ratiocinated that
employers should not be compelled to keep in their employ undesirable and undeserving laborers. For the
irregularity, i.e., the failure to observe the 30-day notice of termination, the employer was made to pay a measly sum
ranging from P1,000.00 to P10,000.00.

With regard to the indemnity or penalty, which we prefer seriously to be referred to as "disturbance compensation,"
the Court has awarded varying amounts depending on the circumstances of each case and the gravity of the
commission. We now propose that the amount of the award be uniform and rational and not arbitrary. The reason
for the proposal or modication is that in their non-compliance with the 30-day notice requirement the erring
employers, regardless of the peculiar circumstances of each case, commit the infraction only by the single act of
not giving any notice to their workers. It cannot be gainfully said that the infraction in one case is heavier than in
the other as the non-observance constitutes one single act. Thus, if the dismissal is illegal, i.e. there is no just or
authorized cause, a disturbance compensation in the amount of P10,000.00 may be considered reasonable. If the
dismissal is for a just cause but without notice, a disturbance compensation in the amount P5,000.00 may be
given. In termination for an authorized cause and the notice requirement was not complied with, we distinguish
further: If it is to save the employer from imminent bankruptcy or business losses, the disturbance compensation to
be given is P5,000.00. If the authorized cause was intended for the employer to earn more prots, the amount of
disturbance compensation is P10,000.00. This disturbance compensation, again we strongly recommend, should
be given to the dismissed employee at the rst instance, the moment it is shown that his employer has committed
the infraction of not complying with the 30-day written notice requirement to tide him over during his economic
dislocation.

The right of the laborers to be informed of their impending termination cannot be taken lightly, and the award of any
amount below P5,000.00 may be too anemic to satisfy the fundamental protection especially accorded to labor and
the workingman. In fact, it is hardly enough to sustain a family of three; more so if the employee has ve or more
children, which seems to be the average size of a Filipino family.

Henceforth, if the dismissal is for a just cause but without observance of the 30-day notice requirement, the
dismissal is deemed improper and irregular. If later the dismissal is ascertained to be without just cause, the
dismissed employee is entitled to reinstatement, if this be feasible, otherwise to separation pay and back wages
plus disturbance compensation of P10,000.00 and moral damages, if warranted. On the other hand, if the dismissal
is ascertained to be with just cause, the dismissed employee is entitled nevertheless to a disturbance
compensation of P5,000.00 if the legal requirement of the 30-day notice to both employee and DOLE has not been
complied with.

In instances where there is obviously a ground for dismissal, as when the employee has become violent and his
presence would cause more harm to his co-workers and the security and serenity of the workplace, the employee
may be suspended in the meantime until he is heard with proper observance of the 30-day notice requirement.
Likewise, if the dismissal is for an authorized cause but without the required notice, the dismissal is improper and
irregular and the employee should be paid separation pay, back wages and disturbance compensation of P5,000.00
or P10,000.00.00 depending on the cause. As already intimated, if the authorized cause is for the purpose of saving
the employer from imminent bankruptcy or business losses, the disturbance compensation should be P5,000.00;
otherwise, if the authorized cause is for the employer, in the exercise of management prerogative, to save and earn
more prots, the disturbance compensation should be P10,000.00.

In the instant case, Serrano was given his walking papers only on the very same day his termination was to take
effect. DOLE was not served any written notice. In other words, there was non-observance of the 30-day notice
requirement to both Serrano and the DOLE. Serrano was thus terminated for an authorized cause but was not
accorded his right to 30-day notice. Thus, his dismissal being improper and irregular, he is entitled to separation
pay and back wages the amounts of which to be determined by the Labor Arbiter, plus P10,000.00 as disturbance
compensation which, from its very nature, must be paid immediately to cushion the impact of his economic
dislocation.

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

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

FOR ALL THE FOREGOING, the Decision of respondent National Labor Relations Commission should be MODIFIED.
The termination of petitioner RUBEN SERRANO being based on an authorized cause should be SUSTAINED AS
VALID although DECLARED IRREGULAR for having been effected without the mandatory 30-day notice.

ISETANN DEPARTMENT STORE INC. should PAY petitioner SERRANO back wages and separation pay the amounts
of which to be determined by the Labor Arbiter, plus P10,000.00 as disturbance compensation which must be paid
immediately. Consequently, except as regards the disturbance compensation, the case should be REMANDED to
the Labor Arbiter for the immediate computation and payment of the back wages and separation pay due petitioner.

EXCEPT as herein stated, I concur with the majority.

PUNO, J., dissenting opinion;

The rule of audi alteram partem hear the other side, is the essence of procedural due process. That a "party is not
to suffer in person or in purse without an opportunity of being heard" is the oldest established principle in
administrative law.1 Today, the majority is relies that the all important right of an employee to be notied before he
is dismissed for a just or authorized cause is not a requirement of due process. This is a blow on the breadbasket
of our lowly employees, a considerable erosion of their constitutional right to security of tenure, hence this humble
dissenting opinion.

A review of our law on dismissal is in order.

I. DISMISSAL DUE TO JUST CAUSE

The law allowing dismissal of an employee due to a just cause is provided in Article 282 of the Labor Code:

Art. 282. Termination by employer. An employer may terminate an employment for any of the following
causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his 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 duly
authorized representative;

(d) Commission of the crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representative; and

(e) Other causes analogous to the foregoing.

The long established jurisprudence2 is that to justify dismissal of an employee for a just cause, he must be given
two kinds of notice by his employer, viz: (1) notice to apprise the employee of the particular acts or omissions for
which the dismissal is sought, and (2) subsequent notice to inform him of the employer's decision to dismiss him.
Similarly, deeply ingrained is our ruling that these pre and post notice requirements are not mere technicalities but
are requirements of due process.3

Then came the case of Wenphil Corporation vs. NLRC and Mallare in 1989.4 It is the majority view that Wenphil
reversed the long standing policy of this Court on dismissal. This is too broad a reading of Wenphil. A careful
statement of the facts of Wenphil and the ruling of this Court is thus proper.

First, the facts. The private respondent Roberto Mallare is the assistant head of the backroom department of
petitioner Wenphil Corporation. At about 2:30 pm on May 20, 1985, Mallare had an altercation with his co-employee,
Job Barrameda, about tending the Salad Bar. He slapped Barrameda's cap, stepped on his foot, picked up an ice
scooper and brandished it against the latter. He refused to be pacied by another employee who reported the
incident to Delilah Hermosura, assistant manager. Hermosura summoned Mallare but the latter refused to see the
former. It took a security guard to bring Mallare to Hermosura. Instead of making an explanation, Mallare shouted
profane words against Hermosura. He declared that their altercation should only be settled by him and Barrameda.

The following morning, Mallare was suspended. In the afternoon, he was dismissed from the service. He received
an ofcial notice of his dismissal four (4) days later.

Mallare led with the Labor Arbiter a complaint for illegal suspension, illegal dismissal and unfair labor practice. No
hearing was conducted in view of the repeated absence of the counsel of Mallare. The parties submitted their
respective position papers. On December 3, 1986, the Arbiter denied the complaint as he found Mallare guilty of
grave misconduct and insubordination, which are just causes for dismissal. The Arbiter also ruled that Mallare was
not denied due process. On appeal, the NLRC reversed. It held that Mallare was denied due process before he was
dismissed. It ordered Mallare's reinstatement and the payment of his one (1) year backwages.

On certiorari to this Court, we reversed the NLRC and reinstated the decision of the Arbiter with the modication that
petitioner should pay to Mallare an indemnity of P1,000.00 for dismissing Mallare without any notice and hearing.
We held:

Petitioner insists that private respondent was afforded due process but he refused to avail of his right to the
same; that when the matter was brought to the labor arbiter he was able to submit his position paper
although the hearing cannot proceed due to the non-appearance of his counsel; and that the private
respondent is guilty of serious misconduct in threatening or coercing a co-employee which is a ground for
dismissal under Article 283 of the Labor Code.

The failure of petitioner to give private respondent the benet of a hearing before he was dismissed
constitutes an infringement of his constitutional right to due process of law and equal protection of the laws.
The standards of due process in judicial as well as administrative proceedings have long been established.
In its bare minimum due process of law simply means giving notice and opportunity to be heard before
judgment is rendered.

The claim of petitioner that a formal investigation was not necessary because the incident, which gave rise
to the termination of private respondent, was witnessed by his co-employees and supervisors, is without
 merit. The basic requirement of due process is that which hears before it condemns, which proceeds upon
inquiry and renders judgment only after trial.

However, it is a matter of fact that when the private respondent led a complaint against petitioner, he was
afforded the right to an investigation by the labor arbiter. He presented his position paper as did the
petitioner. If no hearing was had, it was the fault of private respondent as his counsel failed to appear at the
scheduled hearings. The labor arbiter concluded that the dismissal of private respondent was for just cause.
He was found guilty of grave misconduct and insubordination. This is borne by the sworn statements of
witnesses. The Court is bound by this nding of the labor arbiter.

By the same token, the conclusion of the public respondent NLRC on appeal that private respondent was not
afforded due process before he was dismissed is binding on this Court. Indeed, it is well taken and supported
by the records. However, it can not justify a ruling that private respondent should be reinstated with back
wages as the public respondent NLRC so decreed. Although belatedly, private respondent was afforded due
process before the labor arbiter wherein the just cause of his dismissal had been established. With such
nding, it would be arbitrary and unfair to order his reinstatement with back wages.

Three member of the Court led concurring and dissenting opinions. Madam Justice Herrera opined that: (a)
Mallare was dismissed for cause, hence, he is not entitled to reinstatement and backwages; (b) he was not denied
due process; and (c) he has no right to any indemnity but to separation pay to cushion the impact of his loss of
employment Mr. Justice Padilla took the view that: (1) Mallare was not entitled to reinstatement and backwages as
he was guilty of grave misconduct and insubordination; (2) he was denied administrative due process; and (3) for
making such denial, Wenphil should pay "separation pay (instead of indemnity) in the sum of P1,000.00." Madam
Justice Cortes held that: (1) Mallare was not illegally dismissed; (2) he was not denied due process; (3) he was not
entitled to indemnity; and (4) if P1,000.00 was to be imposed on Wenphil as an administrative sanction, it should
form part of the public fund of the government.

I shall discuss later that Wenphil did not change our ruling that violation of the pre-dismissal notice requirement is
an infringement of due process.

II. DISMISSAL DUE TO AUTHORIZED CAUSE

The applicable law on dismissal due to authorized cause is Article 283 of the Labor Code which provides:

Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the
employment of any employee due to the installation of labor serving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operation of the establishment or undertaking unless the
closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the
workers and the [Department] of Labor and Employment at least one (1) month before the intended date
thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at
least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent
losses and in cases of closures or cessation of operations of establishment or undertaking not due to
serious business losses or nancial reverses, the separation pay shall be equivalent to one (1) month pay or
at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6)
months shall be considered one (1) whole year.

In Sebuguero v. NLRC,5 we held thru our esteemed Chief Justice Davide that "the requirement of notice to both the
employees concerned and the Department of Labor and Employment (DOLE) is mandatory and must be written and
given at least one month before the intended date of retrenchment." We explained that the "notice to the DOLE is
essential because the right to retrench is not an absolute prerogative of an employer but is subject to the
requirement of law that retrenchment be proved to prevent losses. The DOLE is the agency that will determine
whether the planned retrenchment is justied and adequately supported by fact."6 Nonetheless, we ruled:

The lack of written notice to the petitioners and to the DOLE does not, however, make the petitioners'
retrenchment illegal such that they are entitled to the payment of back wages and separation pay in lieu of
reinstatement as they contend. Their retrenchment, for not having been effected with the required notices, is
merely defective. In those cases where we found the retrenchment to be illegal and ordered the employees'
reinstatement and the payment of backwages, the validity of the cruse for retrenchment, that is the existence
of imminent or actual serious or substantial losses, was not proven. But here, such a cause is present as
found by both the Labor Arbiter and the NLRC. There is only a violation by GTI of the procedure prescribed in
Article 283 of the Labor Code in effecting the retrenchment of the petitioners.1wphi1.nt

It is now settled that where the dismissal of an employee is in fact for a just and valid cause and is so proven to be
but he is not accorded his right to due process, i.e., he was not furnished the twin requirements of notice and the
opportunity to be heard, the dismissal shall be upheld but the employer must be sanctioned for non-compliance
with the requirements of or for failure to observe due process. The sanction, in the nature of indemnication or
penalty, depends on the facts of each case and the gravity of the omission committed by the employer and has
ranged from P1,000.00 as in the cases of Wenphil vs. National Labor Relations Commission, Seahorse Maritime Corp. v.
National Labor Relations Commission, Shoemart, Inc. vs. National Labor Relations Commission, Rubberworld (Phils.) Inc.
vs. National Labor Relations Commission, Pacic Mills, Inc. vs. Alonzo, and Aurelio vs. National Labor Relations
Commission to P10,000.00 in Reta vs. National Labor Relations Commission and Alhambra Industries, Inc. vs. National
Labor Relations Commission. More recently, in Worldwide Papermills, Inc. vs. National Labor Relations Commission, the
sum of P5,000.00 was awarded to the employee as indemnication for the employer's failure to comply with the
requirements of procedural due process.

Accordingly, we afrm the deletion by the NLRC of the award of back wages, But because the required notices of
the petitioners' retrenchment were not served upon the petitioners and the DOLE, GTI must be sanctioned for such
failure and thereby required to indemnify each of the petitioners the sum of P20,000.00 which we nd to be just and
reasonable under the circumstances of this case.

III. RE-EXAMINATION OF THE WENPHIL DOCTRINE:

FROM BAD TO WORSE

The minority of the Court has asked for a re-examination of Wenphil because as the majority correctly observed,
"the number of cases involving dismissals without the requisite notice to the employee although effected for just or
authorized causes suggests that the imposition of ne for violation of the notice requirement has not been effective
in deterring violations of the notice requirement."

We must immediately set Wenphil in its proper perspective as it is a very exceptional case. Its doctrine must be
limited to its distinct facts. Its facts therefore ought to be carefully examined again. In Wenphil, it was clearly
established that the employee had a violent temper, caused trouble during ofce hours and even deed his
superiors as they tried to pacify him. The employee was working for a fast food chain that served the public and
where violence has no place. These facts were established only in the proceedings before the Labor Arbiter after
the employee led a complaint for illegal dismissal. There were no formal investigation proceedings before the
employer as the employment was dismissed without any notice by the employer. Given these facts, we ruled that
the pre-dismissal notice requirement was part of due process; nonetheless, we held that the employee was given
due process as he was heard by the Labor Arbiter; we found that the proceedings before the Labor Arbiter proved
that the employer was guilty of grave misconduct and insubordination; we concluded with the rule that it would be
highly prejudicial to the interest of the employer to reinstate the employee, but the employer must indemnify the
employee the amount of P1,000.00 for dismissing him without notice. We further held that "the measure of this
award depends on the facts or each case and the gravity of the omission committed by the employer."7

At the outset, I wish to emphasize that Wenphil itself held, and repeatedly held that "the failure of petitioner to give
private respondent the benet of a hearing before he was dismissed, constitutes an infringement of his
constitutional right to due process of law and equal protection of the laws. The standards of due process of law in
judicial as well as administrative proceedings have long been established. In its bare minimum due process of law
simply means giving notice and opportunity to be heard before judgment is rendered."8 The Court then satised
itself with this bare minimum when it held that the post dismissal hearing before the Labor Arbiter was enough
compliance with demands of due process and refused to reinstate an eminently undesirable employee. Heretofore,
the Court was far from satised with this bare minimum as it strictly imposed on an employer compliance with the
requirement of pre-dismissal notice, violation of which resulted in orders of reinstatement of the dismissed
employee. This is the only wrinkle wrought by Wenphil in our jurisprudence on dismissal. Nonetheless, it should be
stressed that the Court still punished Wenphil's violation of the pre-dismissal notice requirement as it was ordered
to pay an indemnity of P1,000.00 to the employee. The indemnity was based on the iterated and reiterated rule that
"the dismissal of an employee must be for just or authorized cause and after due process."9

Our ten (10) years experience with Wenphil is not a happy one. Unscrupulous employers have abused the Wenphil
ruling. They have dismissed without notice employees including those who are not as eminently undesirable as the
Wenphil employee. They dismissed employees without notice as a general rule when it should be the exception.
The purpose of the pre-dismissal notice requirement was entirely defeated by employers who were just too willing
to pay an indemnity for its violation. The result, as the majority concedes, is that the indemnity we imposed has not
been effective to prevent unjust dismissals employees. To be sure, this is even a supreme understatement. The
ugly truth is that Wenphil is the mother of many unjust and unauthorized dismissals of employees who are too
weak to challenge their powerful employees.

As the Wenphil indemnity doctrine has proved to be highly inimical to the interest of our employees, I humbly
submit a return to the pre-Wenphil rule where a reasonless violation of the pre-dismissal notice requirement makes
the dismissal of an employee illegal and results in his reinstatement. In ne, we should strike down as illegal the
dismissal of an employee even if it is for a justied end if it is done thru unjustied means for we cannot be
disciples of the Machiavellian doctrine of the end justies the means. With due respect, the majority decision
comes too near this mischievous doctrine by giving emphasis on the end and not the means of dismissal of
employees. What grates is that the majority today espouses a doctrine more pernicious than Wenphil for now it
announces that a violation of the pre-dismissal notice requirement does not even concern due process. The
reasons relied upon by the majority for this new ruling against the job security of employees cannot inspire assent.

FIRST. I would like to emphasize that one undesirable effect of Wenphil is to compel employees to seek relief
against illegal dismissals with the DOLE whereas before, a remedy can be sought before the employer. In shifting
this burden, an employee's uneven ght against his employer has become more uneven. Now, an illegally dismissed
employee often goes to the DOLE without an exact knowledge of the cause of his dismissal. As a matter of
strategy, some employers today dismiss employees without notice. They know that it is more advantageous for
them to litigate with an employee who has no knowledge of the cause of dismissal. The probability is that said
employee will fail to prove the illegality of his dismissal. All that he can prove is that he was dismissed without
notice and the penalty for the omission is a mere ne, a pittance.
The case at bar demonstrates how disastrous Wenphil has been to our helpless employees. In holding that the
petitioner failed to prove his cause of action, the majority held ". . . we have only the bare assertion of petitioner
that, in abolishing the security section, private respondent's real purpose was to avoid payment to the security
checkers of the wage increases provided in the collective bargaining agreement approved in 1990." The bare
assertion of the petitioner is understandable. The notice given to him spoke of a general ground retrenchment.
No details were given about the employer's sudden retrenchment program. Indeed, the employee was dismissed on
the day he received the notice in violation of the 30-day requirement. He was given no time, no opportunity to
ascertain and verify the real cause of his dismissal. Thus, he led with the DOLE a complaint for illegal dismissal
with a hazy knowledge of its real cause. Heretofore, it is the employer whom we blame and penalize if he does not
notify his employee of the cause of his dismissal. Today, the majority puts the blame on the employee for not
knowing why he was dismissed when he was not given any notice of dismissal. In truth, the suspicion of the
petitioner in the case at bar that he was dismissed to avoid payment of their wage increases is not without basis.
The DOLE itself found that petitioner has unpaid wages which were ordered to be paid by the employer. The
majority itself afrmed this nding.

What hurts is that while the majority was strict with the petitioner-employee, it was not so with the employer
ISETANN. Immediately, it validated the nding of the NLRC that petitioner was dismissed due to the redundancy of
his position. This is inconsistent with the nding of the Labor Arbiter that the employer failed to prove
retrenchment, the ground it used to dismiss the petitioner. A perusal of the records will show that Ms. Cristina
Ramos, Personnel Administration Manager of the employer ISETANN testied on the cause of dismissal of the
petitioner. She declared that petitioner was retrenched due to the installation of a labor saving device. Allegedly, the
labor saving device was the hiring of an independent security agency, thus:10

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Atty. Perdigon:

You said that your company decided to phase out the position of security checkers . . .

Ms. Ramos:

Yes Sir.

Q: And instead hired the services of a security agency?

A: Yes, sir.

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

A: We installed a labor saving device.

Q: So you did not retrench?

A: No. sir.

Q: How about the position of Section Head of Security Department?

A: It was abolished in 1991.

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Q: Are you aware of the retrenchment program of the company as stated in this letter?

A: Actually it's not a retrenchment program. It's an installation of a labor saving device.

Q: So you are telling this Court now that there was no retrenchment program?

A: It was actually an installation of a labor saving device (emphasis supplied).

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Q: . . . What (is) this labor saving device that you are referring to?

A: The labor saving device is that the services of a security agency were contracted to handle the services of
the security checkers of our company.

Q: Are you sure of what labor saving means, Madam witness?

A: Yes, sir.

Q: You said you installed a labor saving device, and you installed a security agency as a labor saving device?
 A: We hired the services of a security agency.

Q: So according to you . . . a security agency is a labor saving device?

Atty. Salonga:

Already answered, your Honor.

Obviously, Ms. Ramos could not even distinguish between retrenchment and redundancy. The Labor Arbiter thus
ruled that petitioner's dismissal was illegal. The NLRC, however, reversed. The majority afrmed the NLRC ruling
that ISETANN's phase out of its security employees is a legitimate business decision, one that is necessary to
obtain reasonable return from its investment. To use the phrase of the majority, this is a "bare assertion." Nothing in
the majority decision shows how the return of ISETANN's investment has been threatened to justify its so-called
business decision as legitimate.

SECOND. The majority holds that "the need is for a rule which, while recognizing the employee's right to notice
before he is dismissed or laid off, at the same time acknowledges the right of the employer to dismiss for any of the
just causes enumerated in Art. 282 or to terminate employment for any of the authorized causes mentioned in Arts.
283-284. If the Wenphil rule imposing a ne on an employer who is found to have dismissed an employee for cause
without prior notice is deemed ineffective in deterring employer violations of the notice requirement, the remedy is
not to declare the dismissal void if there are just or valid grounds for such dismissal or if the termination is for an
authorized cause. That would be to uphold the right of the employee but deny the right of the employer to dismiss
for cause. Rather, the remedy is to consider the dismissal or termination to be simply ineffectual for failure of the
employer to comply with the procedure for dismissal or termination.

With due respect, I nd it most difcult to follow the logic of the majority. Before Wenphil, we protected employees
with the ruling that dismissals without prior notice are illegal and the illegally dismissed employee must be
reinstated with backwages. Wenphil diluted that rule when it held that due process is satised if the employee is
given the opportunity to be heard by the Labor Arbiter. It further held that an employee cannot be reinstated if it is
established in the hearing that his dismissal is for a just cause. The failure of the employer to give a pre-dismissal
notice is only to be penalized by payment of an indemnity. The dilution of the rule has been abused by
unscrupulous employers who then followed the "dismiss now, pay later" strategy. This evil practice of employers
was what I expected the majority to address in re-examining the Wenphil doctrine. At the very least, I thought that
the majority would restore the balance of rights between an employee and an employer by giving back the
employee's mandatory right to notice before dismissal. It is disquieting, however, that the majority re-arranged this
balance of right by tilting it more in favor of the employer's right to dismiss. Thus, instead of weakening a bit the
right to dismiss of employers, the majority further strengthens it by insisting that a dismissal without prior notice is
merely "ineffectual" and not illegal.

The stubborn refusal of the majority to appreciate the importance of pre-dismissal notice is difcult to understand.
It is the linchpin of an employee's right against an illegal dismissal. The notice tells him the cause of his dismissal.
It gives him a better chance to contest his dismissal in an appropriate proceeding as laid down in the parties'
collective bargaining agreement or the rules of employment established by the employer, as the case may be. In
addition, it gives to both the employee and employer more cooling time to settle their differences amicably. In ne,
the prior notice requirement and the hearing before the employer give an employee a distinct, different and effective
rst level of remedy to protect his job. In the event the employee is dismissed, he can still le a complaint with the
DOLE with better knowledge of the cause of his dismissal, with longer time to prepare his case, and with greater
opportunity to take care of the nancial needs of his family pendente lite. The majority has taken away from
employees this effective remedy. This is not to say that the pre-dismissal notice requirement equalizes the ght
between an employee and an employer for the ght will remain unequal. This notice requirement merely gives an
employee a ghting chance but that ghting chance is now gone.

It is equally puzzling why the majority believes that restoring the employee's right to pre-dismissal notice will
negate the right of an employer to dismiss for cause. The pre-Wenphil rule simply requires that before the right of
the employer to dismiss can be exercised, he must give prior notice to the employee of its cause. There is nothing
strange nor difcult about this requirement. It is no burden to an employer. He is bereft of reason not to give the
simple notice. If he fails to give notice, he can only curse himself. He forfeits his right to dismiss by failing to follow
the procedure for the exercise of his right. Employees in the public sector cannot be dismissed without prior notice.
Equal protection of law demands similar treatment of employees in the private sector.

THIRD. The case at bar specically involves Article 283 of the Labor Code which lays down four (4) authorized
causes for termination of employment.11 These authorized causes are: (1) installation of labor-saving devices; (2)
redundancy; (3) retrenchment to prevent losses; and (4) closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the law. It also provides that prior to the
dismissal of an employee for an authorized cause, the employer must send two written notices at least one month
before the intended dismissal one notice to the employee and another notice to the Department of Labor and
Employment (DOLE). We have ruled that the right to dismiss on authorized causes is not an absolute prerogative of
an employer.12 We explained that the notice to the DOLE is necessary to enable it to ascertain the truth of the cause
of termination.13 The DOLE is equipped with men and machines to determine whether the planned closure or
cessation of business or retrenchment or redundancy or installation of labor saving device is justied by economic
facts.14 For this reason too, we have held that notice to the employee is required to enable him to contest the factual
bases of the management decision or good faith of the retrenchment or redundancy before the DOLE.15 In addition,
this notice requirement gives an employee a little time to adjust to his joblessness.16
The majority insists that if an employee is laid off for an authorized cause under Article 283 in violation of the prior
notice requirement, his dismissal should not be considered void but only ineffectual. He shall not be reinstated but
paid separation pay and some backwages. I respectfully submit that an employee under Article 283 has a stronger
claim to the right to a pre-dismissal notice and hearing. To begin with, he is an innocent party for he has not
violated any term or condition of his employment. Moreover, an employee in an Article 283 situation may lose his
job simply because of his employer's desire for more prot. Thus, the installation of a labor saving device is an
authorized cause to terminate employment even if its non-installation need not necessarily result in an over-all loss
to an employer possessed by his possessions. In an Article 283 situation, it is easy to see that there is a greater
need to scrutinize the allegations of the employer that he is dismissing an employee for an authorized cause. The
acts involved here are unilateral acts of the employer. Their nature requires that they should be proved by the
employer himself. The need for a labor saving device, the reason for redundancy, the cause for retrenchment, the
necessity for closing or cessation of business are all within the knowledge of the employer and the employer alone.
They involve a constellation of economic facts and factors usually beyond the ken of knowledge of an ordinary
employee. Thus, the burden should be on the employer to establish and justify these authorized causes. Due to
their complexity, the law correctly directs that notice should be given to the DOLE for it is the DOLE more than the
lowly employee that has the expertise to validate the alleged cause in an appropriate hearing. In ne, the DOLE
provides the equalizer to the powers of the employer in an Article 283 situation. Without the equalizing influence of
DOLE, the employee can be abused by his employer.

Further, I venture the view that the employee's right to security of tenure guaranteed in our Constitution calls for a
pre-dismissal notice and hearing rather than a post facto dismissal hearing. The need for an employee to be heard
before he can be dismissed cannot be overemphasized. As aforestated, in the case at bar, petitioner was a regular
employee of ISETANN. He had the right to continue with his employment. The burden to establish that this right has
ceased is with ISETANN, as petitioner's employer. In ne, ISETANN must be the one to rst show that the alleged
authorized cause for dismissing petitioner is real. And on this factual issue, petitioner must be heard. Before the
validity of the alleged authorized cause is established by ISETANN, the petitioner cannot be separated from
employment. This is the simple meaning of security of tenure. With due respect, the majority opinion will reduce
this right of our employees to a mere illusion. It will allow the employer to dismiss an employee for a cause that is
yet to be established. It tells the employee that if he wants to be heard, he can le a case with the labor arbiter, then
the NLRC, and then this Court. Thus, it unreasonably shifts the burden to the employee to prove that his dismissal is
for an unauthorized cause.

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

In the case at bar, the job of the petitioner could have been saved if DOLE was given notice of his dismissal. The
records show that petitioner worked in ISETANN as security checker for six (6) years. He served ISETANN faithfully
and well. Nonetheless, in a desire for more prots, and not because of losses, ISETANN contracted out the security
work of the company. There was no effort whatsoever on the part of ISETANN to accommodate petitioner in an
equivalent position. Yet there was the position of Safety and Security Supervisor where petitioner tted like a
perfect T. Despite petitioner's long and loyal service, he was treated like an outsider, made to apply for the job, and
given a stringent examination which he failed. Petitioner was booted out and given no chance to contest his
dismissal. Neither was the DOLE given the chance to check whether the dismissal of petitioner was really for an
authorized cause. All these because ISETANN did not follow the notice and hearing requirement of due process.

FOURTH. The majority has inflicted a most serious cut on the job security of employees. The majority did nothing to
restore the pre-Wenphil right of employees but even expanded the right to dismiss of employer by holding that the
pre-dismissal notice requirement is not even a function of due process. This seismic shift in our jurisprudence
ought not to pass.

The key to the new majority ruling is that the "due process clause of the Constitution is a limitation on
governmental powers. It does not apply to the exercise of private power such as the termination of employment
under the Labor Code." The main reason alleged is that "only the State has authority to take the life, liberty, or
property of the individual. The purpose of the Due Process Clause is to ensure that the exercise of this power is
consistent with settled usage of civilized society."

There can be no room for disagreement on the proposition that the due process clause found in the Bill of Rights of
the Constitution is a limitation on governmental powers. Nor can there be any debate that acts of government
violative of due process are null and void. Thus, former Chief Justice Roberto Concepcion emphasized in Cuaycong
v. Senbengco 17 that ". . . acts of Congress as well as those of the Executive, can deny due process only under pain
of nullity, and judicial proceedings suffering from the same flaw are subject to the same sanction, any statutory
provision to the contrary notwithstanding." With due respect to the majority, however, I part ways with the majority
in its new ruling that the due process requirement does not apply to the exercise of private power. This overly
restrictive majority opinion will sap the due process right of employees of its remaining utility. Indeed, the new
majority opinion limiting violations of due process to government action alone is a throwback to a regime of law
long discarded by more progressive countries. Today, private due process is a settled norm in administrative law.
Per Schwartz, a known authority in the eld, viz:18

Private Due Process

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

In addition, there has been an extension of procedural due process requirements from governmental to
private action. In Section 5.16 we saw that Goldberg v. Kelly has been extended to the eviction of a tenant
from a public housing project. The courts have not limited the right to be heard to tenants who have
governmental agencies as landlords. Due process requirements also govern acts by "private" landlords
where there is sufcient governmental involvement in the rented premises. Such an involvement exists in the
case of housing aided by Federal Housing Administration nancing and tax advantages. A tenant may not be
summarily evicted from a building operated by a "private" corporation where the corporation enjoyed
substantial tax exemption and had obtained an FHA-insured mortgage, with governmental subsidies to
reduce interest payments. The "private" corporation was so saturated with governmental incidents as to be
limited in its practices by constitutional process. Hence, it could not terminate tenancies without notice and
an opportunity to be heard.

But we need nor rely on foreign jurisprudence to repudiate the new majority ruling that due process restricts
government alone and not private employers like ISETANN. This Court has always protected employees whenever
they are dismissed for an unjust cause by private employers. We have consistently held that before dismissing an
employee for a just cause, he must be given notice and hearing by his private employer. In Kingsize Manufacturing
Corporation vs. NLRC,19 this Court, thru Mr. Justice Mendoza, categorically ruled:

. . . (P)etitioners failure to give notice with warning to the private respondents before their services were
terminated puts in grave doubt petitioners' claim that dismissal was for a just cause. Section 2 Rule XIV of
the Rules implementing the Labor Code provides:

An employer who seeks to dismiss a worker shall furnish him a written notice stating the particular
acts or omission constituting the ground for dismissal. In case of abandonment of work, the notice
shall be served on the worker's last known address.

The notice required, . . ., actually consists of two parts to be separately served on the employee, to wit: (1)
notice to apprise the employee of the particular acts or omissions for which the dismissal is sought; and (2)
subsequent notice to inform him of the employer's decision to dismiss him.

This requirement is not a mere technicality but a requirement of due process to which every employee is
entitled to insure that the employer's prerogative to dismiss or lay off is not abused or exercised in an
arbitrary manner. This rule is clear and unequivocal . . . .20

In other words, we have long adopted in our decisions the doctrine of private due process. This is as it ought to be.
The 1987 Constitution guarantees the rights of workers, especially the right to security of tenure in a separate
article section 3 of Article XIII entitled Social Justice and Human Rights. Thus, a 20-20 vision of the Constitution
will show that the more specic rights of labor are not in the Bill of Rights which is historically directed against
government acts alone. Needless to state, the constitutional rights of labor should be safeguarded against assaults
from both government and private parties. The majority should not reverse our settled rulings outlawing violations
of due process by employers in just causes cases.

To prop up its new ruling against our employees, the majority relates the evolution of our law on dismissal starting
from Article 302 of the Spanish Code of Commerce, to the New Civil Code of 1950, to R.A. No. 1052 (Termination
Pay Law), then to R.A. No. 1787. To complete the picture, let me add that on May 1, 1974, the Labor Code (PD 442)
was signed into law by former President Marcos. It took effect on May 1, 1974 or six months after its promulgation.
The right of the employer to terminate the employment was embodied in Articles 283,21 284,22 and 285.23 Batas
Pambansa Blg. 130 which was enacted on August 21, 1981 amended Articles 283 and 284, which today are cited
as Arts. 282 and 283 of the Labor Code.24

On March 2, 1989, Republic Act No. 6715 was approved which amended, among others, Article 277 of the Labor
Code. Presently, Article 277 (b) reads:
 Art. 277. Miscellaneous provisions. (a) . . . .

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

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

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

(b) With or without a collective agreement, no employer may shut down his establishment or dismiss
or terminate the employment of employees with at least one year of service during the last two years,
whether such service is continuous or broken, without prior written authority issued in accordance
with the rules and regulations as the Secretary may promulgate.

Rule XIV, Book V of the 1997 Omnibus Rules Implementing the Labor Code provides:

Termination of Employment

Sec. 1. Security of tenure and due process. No worker shall be dismissed except for a just or authorized
cause provided by law and after due process.

Sec. 2. Notice of dismissal. Any employer who seeks to dismiss a worker shall furnish him a written notice
stating the particular acts or omissions constituting the grounds for his dismissal. . . .

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Sec. 5. Answer and hearing. The worker may answer the allegations stated against him in the notice of
dismissal within a reasonable period from receipt of such notice. The employer shall afford the worker ample
opportunity to be heard and to defend himself with the assistance of his representative, if he so desires.

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

I respectfully submit that these rulings are more in accord with the need to protect the right of employees against
illegal dismissals. Indeed, our laws and our present Constitution are more protective of the rights and interests of
employees than their American counterpart. For one, to justify private due process, we need not look for the factors
of "sufcient governmental involvement" as American courts do. Article 1700 of our Civil Code explicitly provides:

Art. 1700. The relation between capital and labor are not merely contractual. They are so impressed with
public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to
the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working
conditions, hours of labor and similar subjects.

Nor do we have to strain on the distinction made by American courts between property and privilege and follow
their ruling that due process will not apply if what is affected is a mere privilege. It is our hoary ruling that labor is
property within the contemplation of the due process clause of the Constitution. Thus, in Philippine Movie Pictures
Workers Association vs. Premiere Productions, Inc.,26 private respondent-employer led with the Court of Industrial
Relations (CIR) a petition seeking authority to lay off forty-four of its employees. On the date of the hearing of the
petition, at the request of the counsel of the private respondent, the judge of the CIR conducted an ocular
inspection in the premises of the employer. He interrogated fteen laborers. On the basis of the ocular inspection,
the judge concluded that the petition for lay off was justied. We did not agree and we ruled that "the right of a
person to his labor is deemed to he property within the meaning of constitutional guarantees. That is his means of
livelihood. He can not be deprived of his labor or work without due process of law. . . . (T)here are certain cardinal
primary rights which the Court of Industrial Relations must respect in the trial of every labor case. One of them is
the right to a hearing which includes the right of the party interested to present his own case and to submit
evidence in support thereof."
I wish also to stress that the 1999 Rules and Regulations implementing the Labor Code categorically characterize
this pre-dismissal notice requirement as a requirement of due process. Rule XXIII provides:

Sec. 2. Standards of due process: requirements of notice. In all cases of termination of employment, the
following standards of due process shall be substantially observed.

I. For termination of employment based on just causes as dened in Article 282 of the Code:

(a) A written notice served on the employee specifying the ground or grounds for termination, and
giving to said employee reasonable opportunity within which to explain his side;

(b) A hearing or conference during which the employee concerned, with the assistance of counsel if
the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut
the evidence presented against him; and

(c) A written notice of termination served on the employee indicating that upon due consideration of all
the circumstance, grounds have been established to justify his termination.

In case of termination, the foregoing notices shall be served on the employee's last known address.

II. For termination of employment as based on authorized causes dened 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 Ofce of the Department at least thirty (30) days before the effectivity of the
termination, specifying the ground or grounds for termination.

The new ruling of the majority is not in consonance with this Rule XXIII.

If we are really zealous of protecting the rights of labor as called for by the Constitution, we should guard against
every violation of their rights regardless of whether the government or a private party is the culprit. Section 3 of
Article XIII of the Constitution requires the State to give full protection to labor. We cannot be faithful to this duty if
we give no protection to labor when the violator of its rights happens to be private parties like private employers. A
private person does not have a better right than the government to violate an employee's right to due process. To be
sure, violation of the particular right of employees to security of tenure comes almost always from their private
employers. To suggest that we take mere geriatric steps when it comes to protecting the rights of labor from
infringement by private parties is farthest from the intent of the Constitution. We trivialize the right of the employee
if we adopt the rule allowing the employer to dismiss an employee without any prior hearing and say let him be
heard later on. To a dismissed employee that remedy is too little and too late. The new majority ruling is doubly to
be regretted because it comes at a time when deregulation and privatization are buzzwords in the world being
globalized. In such a setting, the new gods will not be governments but non-governmental corporations. The
greater need of the day therefore is protection from illegal dismissals sans due process by these non-governmental
corporations.

The majority also holds that the "third reason why the notice requirement under Art. 283 is not a requirement of due
process is that the employer cannot really be expected to be entirely an impartial judge of his own cause. This is
also the case in termination of employment for a just cause under Art. 282." Again, with due respect, I beg to
disagree. In an Article 283 situation, dismissal due to an authorized cause, the employer is not called upon to act as
an impartial judge. The employer is given the duty to serve a written notice on the worker and the DOLE at least one
month before the intended date of lay-off. It is the DOLE, an impartial agency that will judge whether or not the
employee is being laid off for an authorized caused.27 It is not the employer who will adjudge whether the alleged
authorized cause for dismissing the employee is fact or ction. On the other hand, in an Article 282 situation,
dismissal for a just cause, it is also incorrect to hold that an employer cannot be an impartial judge. Today, the
procedure on discipline and dismissal of employees is usually dened in the parties' collective bargaining
agreement or in its absence, on the rules and regulations made by the employer himself. This procedure is carefully
designed to be bias free for it is to the interest of both the employee and the employer that only a guilty employee is
disciplined or dismissed. Hence, where the charge against an employee is serious, it is standard practice to include
in the investigating committee an employee representative to assure the integrity of the process. In addition, it is
usual practice to give the aggrieved employee an appellate body to review an unfavorable decision. Stated
otherwise, the investigators are mandated to act impartially for to do otherwise can bring havoc less to the
employee but more to the employer. For one, if the integrity of the grievance procedure becomes suspect, the
employees may shun it and instead resort to coercive measures like picketing and strikes that can nancially bleed
employers. For another, a wrong, especially a biased judgment can always be challenged in the DOLE and the
courts and can result in awards of huge damages against the company. Indeed, the majority ruling that an
employer cannot act as an impartial judge has no empirical evidence to support itself. Statistics in the DOLE will
prove the many cases won by employees before the grievance committees manned by impartial judges of the
company.

Next, the majority holds that "the requirement to hear an employee before he is dismissed should be considered
simply as an application of the Justinian precept, embodied in the Civil Code, to act with justice, give everyone his
due, and observe honesty and good faith toward one's fellowmen." It then rules that violation of this norm will
render the employer liable for damages but will not render his act of dismissal void. Again, I cannot join the majority
stance. The faultline of this ruling lies in the refusal to recognize that employer-employee relationship is governed
by special labor laws and not by the Civil Code. The majority has disregarded the precept that relations between
capital and labor are impressed with public interest. For this reason, we have the Labor Code that specially
regulates the relationship between employer-employee including dismissals of employees. Thus, Article 279 of the
Labor Code specically provides that "in cases of regular employment, the employer shall not terminate the
services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly
dismissed from work shall be entitled to instatement without loss of seniority rights and other privileges and to his
full backwages, inclusive of allowances, and to his other benets or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his actual reinstatement." This provision of the
Labor Code clearly gives the remedies that an unjustly dismissed employee deserves. It is not the Civil Code that is
the source of his remedies.

The majority also holds that lack of notice in an Article 283 situation merely makes an employee dismissal
"ineffectual" but not illegal. Again, the ruling is sought to be justied by analogy and our attention is called to Article
1592, in relation to Article 1191 of the Civil Code. It is contended that "under these provisions, while the power to
rescind is implied in reciprocal obligations, nonetheless, in cases involving the sale of immovable property, the
vendor cannot rescind the contract even though the vendee defaults in the payment of the price, except by bringing
an action in court or giving notice of rescission by means of a notarial demand." The analogy of the majority cannot
be allowed both in law and in logic. The legal relationship of an employer to his employee is not similar to that of a
vendor and a vendee. An employee suffers from a distinct disadvantage in his relationship with an employer, hence,
the Constitution and our laws give him extra protection. In contrast, a vendor and a vendee in a sale of immovable
property are at economic par with each other. To consider an employer-employee relationship as similar to a sale of
commodity is an archaic abomination. An employer-employee relationship involves the common good and labor
cannot be treated as a mere commodity. As well-stated by former Governor General Leonard Wood in his inaugural
message before the 6th Philippine Legislature on October 27, 1922, "it is opportune that we strive to impress upon
all the people that labor is neither a chattel nor a commodity, but human and must be dealt with from the standpoint
of human interests."

Next, the majority holds that under the Labor Code, only the absence of a just cause for the termination of
employment can make the dismissal of an employee illegal. Quoting Article 279 which provides:

Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an
employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benets or their monetary equivalent computed from
the time his compensation was withheld from him up to the time of his actual reinstatement.

it is then rationalized that "to hold that the employer's failure to give notice before dismissing an employee . . .
results in the nullity of the dismissal would, in effect, be to amend Article 279 by adding another ground, for
considering a dismissal illegal." With due respect, the majority has misread Article 279. To start with, the article is
entitled "Security of Tenure" and therefore protects an employee against dismissal not only for an unjust cause but
also for an unauthorized cause. Thus, the phrase "unjustly dismissed" refers to employees who are dismissed
without just cause and to employees who are laid off without any authorized cause. As heretofore shown, we have
interpreted dismissals without prior notice as illegal for violating the right to due process of the employee. These
rulings form part of the law of the land and Congress was aware of them when it enacted the Labor Code and when
its implementing rules and regulations were promulgated especially the rule ordering employers to follow due
process when dismissing employees. Needless to state, it is incorrect for the majority to urge that we are in effect
amending Article 279.

In further explication of its ruling, the majority contends "what is more, it would ignore the fact that under Art. 285, if
it is the employee who fails to give a written notice to the employer that he is leaving the service of the latter, at
least one month in advance, his failure to comply with the legal requirement does not result in making his
resignation void but only in making him liable for damages." Article 285(a) states: "An employee may terminate
without just cause the employee-employer relationship by serving a written notice on the employer at least one (1)
month in advance. The employer upon whom no such notice was served may hold the employee liable for
damages."

In effect, the majority view is that its new ruling puts at par both the employer and the employee under Article
285, the failure of an employee to pre-notify in writing his employer that he is terminating their relationship does not
make his walk-out void; under its new ruling, the failure of an employer to pre-notify an employee before his
dismissal does not also render the dismissal void. By this new ruling, the majority in a short stroke has rewritten the
law on dismissal and tampered its pro-employee philosophy. Undoubtedly, Article 285 favors the employee as it
does not consider void his act of terminating his employment relationship before giving the required notice. But this
favor given to an employee just like the other favors in the Labor Code and the Constitution are precisely designed
to level the playing eld between the employer and the employee. It cannot be gainsaid that employees are the
special subject of solicitous laws because they have been and they continue to be exploited by unscrupulous
employers. Their exploitation has resulted in labor warfare that has broken industrial peace and slowed down
economic progress. In the exercise of their wisdom, the founding fathers of our 1935, 1973 and 1987 Constitutions
as well as the members our past and present Congresses, have decided to give more legal protection and better
legal treatment to our employees in their relationship with their employer. Expressive of this policy is President
Magsaysay's call that "he who has less in life should have more in law." I respectfully submit that the majority
cannot revise our laws nor shun the social justice thrust of our Constitution in the guise of interpretation especially
when its result is to favor employers and disfavor employees. The majority talks of high nobility but the highest
nobility it to stoop down to reach the poor.

IV. NO UNJUST RESULTS OF CONSIDERING DISMISSALS WITHOUT PRIOR NOTICE AS ILLEGAL

The majority further justies its new ruling by holding:

The refusal to look beyond the validity of the initial action taken by the employer to terminate employment
either for an authorized or just cause can result in an injustice to the employer. For not having been given
notice and hearing before dismissing an employee, who is otherwise guilty of, say, theft, or even of an
attempt against the life of the employer, an employer will be forced to keep in his employ such guilty
employee. This is unjust.

It is true the Constitution regards labor as "a primary social economic force." But so does it declare that it
"recognizes the indispensable role of the private sector, encourages private enterprise, and provides
incentives to needed investment." The Constitution bids the State to "afford full protection to labor." But it is
equally true that "the law, in protecting the rights of the laborer, authorizes neither oppression nor self-
destruction of the employer." And it is oppression to compel the employer to continue in employment one
who is guilty or to force the employer to remain in operation when it is not economically in his interest to do
so.

With due respect, I cannot understand this total turn around of the majority on the issue of the unjustness of lack of
pre-dismissal notice to an employee. Heretofore, we have always considered this lack of notice as unjust to the
employee. Even under Article 302 of the Spanish Code of Commerce of 1882 as related by the majority, an
employer who opts to dismiss an employee without any notice has to pay a mesada equivalent to his salary for one
month because of its unjustness. This policy was modied by our legislators in favor of a more liberal treatment of
labor as our country came under the influence of the United States whose major labor laws became the matrix of
our own laws like R.A. 875, otherwise known as the Industrial Peace Act. In accord with these laws, and as
aforediscussed, we laid down the case law that dismissals without prior notice offend due process. This is the case
law when the Labor Code was enacted on May 1, 1974 and until now despite its amendments. The 1935 and the
1973 Constitutions did not change this case law. So with the 1987 Constitution which even strengthened the rights
of employees, especially their right to security of tenure. Mr. Justice Laurel in his usual inimitable prose expressed
this shift in social policy in favor of employees as follows:

It should be observed at the outset that our Constitution was adopted in the midst of surging unrest and
dissatisfaction resulting from economic and social distress which was threatening the stability of
governments the world over. Alive to the social and economic forces at work, the framers of our Constitution
boldly met the problems and difculties which faced them and endeavored to crystallize, with more or less
delity, the political, social and economic propositions of their age, and this they did, with the consciousness
that the political and philosophical aphorism of their generation will, in the language of a great jurist, "be
doubted by the next and perhaps entirely discarded by the third." (Chief Justice Winslow in Gorgnis v. Falk
Co., 147 Wis., 327; 133 N. W., 209). Embodying the spirit of the present epoch, general provisions were
inserted in the Constitution which are intended to bring about the needed social and economic equilibrium
between component elements of society through the application of what may be termed as the justitia
communis advocated by Grotius and Leibnitz many years ago to be secured through the counter-balancing of
economic and social forces and employers or landlords, and employees or tenants, respectively; and by
prescribing penalties for the violation of the orders" and later, Commonwealth Act No. 213, entitled "An Act to
dene and regulate legitimate labor organizations."28

This ingrained social philosophy favoring employees has now been weakened by the new ruling of the majority. For
while this Court has always considered lack of pre-dismissal notice as unjust to employees, the new ruling of the
majority now declares it is unjust to employers as if employers are the ones exploited by employees. In truth, there
is nothing unjust to employers by requiring them to give notice to their employees before denying them their jobs.
There is nothing unjust to the duty to give notice for the duty is a reasonable duty. If the duty is reasonable, then it
is also reasonable to demand its compliance before the right to dismiss on the part of an employer can be
exercised. If it is reasonable for an employer to comply with the duty, then it can never be unjust if non-compliance
therewith is penalized by denying said employer his right to dismiss. In ne, if the employer's right to dismiss an
employee is forfeited for his failure to comply with this simple, reasonable duty to pre-notify his employee, he has
nothing to blame but himself. If the employer is estopped from litigating the issue of whether or not he is
dismissing his employee for a just or an authorized cause, he brought the consequence on to himself. The new
ruling of the majority, however, inexplicably considers this consequence as unjust to the employer and it merely
winks at his failure to give notice.

V. A LAST WORD

The new ruling of the majority erodes the sanctity of the most important right of an employee, his constitutional
right to security of tenure. This right will never be respected by the employer if we merely honor the right with a
price tag. The policy of "dismiss now and pay later" favors monied employers and is a mockery of the right of
employees to social justice. There is no way to justify this pro-employer stance when the 1987 Constitution is
undeniably more pro-employee than our previous fundamental laws. Section 18 of Article II (State Policies)
provides that "the State afrms labor as a primary social economic force. It shall protect the rights of workers and
promote their welfare." Section 1, Article XIII (Social Justice and Human Rights) calls for the reduction of economic
inequalities. Section 3, Article XIII (Labor) directs the State to accord full protection to labor and to guaranty
security of tenure. These are constitutional polestars and not mere works of cosmetology. Our odes to the poor will
be meaningless mouthfuls if we cannot protect the employee's right to due process against the power of the peso
of employers.
To an employee, a job is everything. Its loss involves terrible repercussions stoppage of the schooling of children,
ejectment from leased premises, hunger to the family, a life without any safety net. Indeed, to many employees,
dismissal is their lethal injection. Mere payment of money by way of separation pay and backwages will not secure
food on the mouths of employees who do not even have the right to choose what they will chew.

I vote to grant the petition.

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

The lawful severance by an employer of an employer-employee relationship would require a valid cause. There are,
under the Labor Code, two groups of valid causes, and these are the just causes under Article 2821 and the
authorized causes under Article 2832 and Article 284.3

An employee whose employment is terminated for a just cause is not entitled to the payment of separation
benets.4 Separation pay would be due, however, when the lay-off is on account of an authorized cause. The
amount of separation pay would depend on the ground for the termination of employment. A lay-off due to the
installation of a labor saving device, redundancy (Article 283) or disease (Article 284), entitles the worker to a
separation pay equivalent to "one (1) month pay or at least one (1) month pay for every year of service, whichever is
higher." When the termination of employment is due to retrenchment to prevent losses, or to closure or cessation of
operations of an establishment or undertaking not due to serious business losses or nancial reverses, the
separation pay is only an equivalent of "one (1) month pay or at least one-half (1/2) month pay for every year of
service, whichever is higher." In the above instances, a fraction of at least six (6) months is considered as one (1)
whole year.

Due process of law, in its broad concept, is a principle in our legal system that mandates due protection to the basic
rights, inherent or accorded, of every person against harm or transgression without an intrinsically just and valid
law, as well as an opportunity to be heard before an impartial tribunal, that can warrant such an impairment. Due
process guarantees against arbitrariness and bears on both substance and procedure. Substantive due process
concerns itself with the law, its essence, and its concomitant efcacy; procedural due process focuses on the rules
that are established in order to ensure meaningful adjudications appurtenant thereto.

In this jurisdiction, the right to due process is constitutional and statutory.

Due process in the context of a termination of employment, particularly, would be two-fold, i.e., substantive due
process which is complied with when the action of the employer is predicated on a just cause or an authorized
cause, and procedural due process which is satised when the employee has the opportunity to contest the
existence of the ground invoked by the employer in terminating the contract of employment and to be heard
thereon. I nd it difcult to ascribe either a want of wisdom or a lack of legal basis to the early pronouncements of
this Court that sanction the termination of employment when a just or an authorized cause to warrant the
termination is clearly extant. Regrettably, the Court in some of those pronouncements has used, less than guarded
in my view, the term "due process" when referring to the notices prescribed in the Labor Code5 and its implementing
rules6 that could, thereby, albeit unintendedly and without meaning to, confuse the latter with the notice requirement
in adjudicatory proceedings. It is not seldom when the law puts up various conditions in the juridical relations of
parties; it would not be accurate to consider, I believe, an infraction thereof to ipso-facto raise a problem of due
process. The mere failure of notice of the dismissal or lay-off does not foreclose the right of an employee from
disputing the validity, in general, of the termination of his employment, or the veracity, in particular, of the cause that
has been invoked in order to justify that termination. In assailing the dismissal or lay-off, an employee is entitled to
be heard and to be given the corresponding due notice of the proceedings. It would be when this right is withheld
without cogent reasons that, indeed, it can rightly be claimed that the fundamental demands of procedural due
process have been unduly discarded.

I do appreciate the fact that the prescribed notices can have consequential benets to an employee who is
dismissed or laid off, as the case may be; its non-observance by an employer, therefore, can verily entitle the
employee to an award of damage but, to repeat, not to the extent of rendering outrightly illegal that dismissal or lay-
off predicated on valid grounds. I would consider the indemnication to the employee not a penalty or a ne against
the employer, the levy of either of which would require an appropriate legislative enactment; rather, I take the grant
of indemnity as justiable as an award of nominal damages in accordance with the provisions of Articles 2221-
2223 of the Civil Code, viz:

Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or
invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.

Art. 2222. The court may award nominal damages in every obligation arising from any source enumerated in
article 1157, or in every case where any property right has been invaded.

Art. 2223. The adjudication of nominal damages shall preclude further contest upon the right involved and all
accessory questions, as between the parties to the suit, or their respective heirs and assigns.

There is no xed formula for determining the precise amount of nominal damages. In xing the amount of nominal
damages to be awarded, the circumstances of each case should thus be taken into account, such as, to exemplify,
the

(a) length of service or employment of the dismissed employee;

(b) his salary or compensation at the time termination of employment vis-a-vis the capability of the employer
to pay;

(c) question of whether the employer has deliberately violated the requirements for termination of
employment or has attempted to comply, at least substantially, therewith; and/or

(d) reasons for the termination of employment.

I might stress the rule that the award of nominal damages is not for the purpose of indemnication for a loss but
for the recognition and vindication of a right. The degree of recovery therefor can depend, on the one hand, on the
constitution of the right, and, upon the other hand, on the extent and manner by which that right is ignored to the
prejudice of the holder of that right.

In ne7

A. A just cause or an authorized cause and a written notice of dismissal or lay-off, as the case may be, are
required concurrently but not really equipollent in their consequence, in terminating an employer-employee
relationship.

B. Where there is neither just cause nor authorized cause, the reinstatement of the employee and the
payment of back salaries would be proper and should be decreed. If the dismissal or lay-off is attended by
bad faith or if the employer acted in wanton or oppressive manner, moral and exemplary damages might also
be a warded. In this respect, the Civil Code provides:

Art. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court
should nd that, under the circumstances, such damages are just due. The same rule applies to
breaches of contract where the defendant acted fraudulently or in bad faith.

Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages if the defendant
acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner (Civil Code).

Separation pay can substitute for reinstatement if such reinstatement is not feasible, such as in case of a
clearly strained employer-employee relationship (limited to managerial positions and contracts of
employment predicated on trust and condence) or when the work or position formerly held by the
dismissed employee plainly has since ceased to be available.

C. Where there is just cause or an authorized cause for the dismissal or lay-off but the required written
notices therefor have not been properly observed by an employer, it would neither be light and justiable nor
likely intended by law to order either the reinstatement of the dismissed or laid-off employee or the payment
of back salaries to him simply for the lack of such notices if, and so long as, the employee is not deprived of
an opportunity to contest that dismissal or lay-off and to accordingly be heard thereon. In the termination of
employment for an authorized cause (this cause being attributable to the employer), the laid-off employee is
statutorily entitled to separation pay, unlike a dismissal for a just cause (a cause attributable to an employee)
where no separation pay is due. In either case, if an employer fails to comply with the requirements of notice
in terminating the services of the employee, the employer must be made to pay, as so hereinabove
expressed, corresponding damages to the employee.

WHEREFORE, I vote to hold (a) that the lay-off in the case at bar is due to redundancy and that, accordingly, the
separation pay to petitioner should be increased to one month, instead of one-half month, pay for every year of
service, and (b) that petitioner is entitled to his unpaid wages, proportionate 13th-month pay, and an indemnity of
P10,000.00 in keeping with the nature and purpose of, as well as the rationale behind, the grant of nominal
damages.

PANGANIBAN, J., separate opinion;

In the case before us, the Court is unanimous in at least two ndings: (1) petitioner's dismissal was due to an
authorized cause, redundancy; and (2) petitioner was notied of his dismissal only on the very day his employment
was terminated. The contentious issue arising out of these two ndings is as follows: What is the legal effect and
the corresponding sanction for the failure of the employer to give the employee and the Department of Labor and
Employment (DOLE) the 30-day notice of termination required under Article 283 of the Labor Code?

During the last ten (10) years, the Court has answered the foregoing question by ruling that the dismissal should be
upheld although the employee should be given "indemnity or damages" ranging from P1,000 to P10,000 depending
on the circumstances.

The present ponencia of Mr. Justice Mendoza holds that "the termination of his employment should be considered
ineffectual and the [employee] should be paid back wages" from the time of his dismissal until the Court nds that
the dismissal was for a just cause.

Reexamination of the "Indemnity Only" Rule

I am grateful that the Court has decided to reexamine our ten-year doctrine on this question and has at least, in the
process, increased the monetary award that should go to the dismissed employee from a nominal sum in the
concept "indemnity or damages" to "full back wages." Shortly after my assumption of ofce on October 10, 1995, I
already questioned this practice of granting "indemnity only" to employees who were dismissed for cause but
without due process.1 I formally registered reservations on this rule in my ponencia in MGG Marine Services v. NLRC2
and gave it full discussion in my Dissents in Better Buildings v. NLRC3 and in Del Val v. NLRC.4

Without in any way diminishing my appreciation of this reexamination and of the more nancially-generous
treatment the Court has accorded labor, I write to take issue with the legal basis of my esteemed colleague, Mr.
Justice Mendoza, in arriving at his legal conclusion that "the employer's failure to comply with the notice
requirement does not constitute a denial of due process but a mere failure to observe a procedure for the
termination of employment which makes the termination of employment merely ineffectual." In short, he believes
that (1) the 30-day notice requirement nds basis only in the Labor Code, and (2) the sanction for its violation is
only "full back wages."

With due respect, I submit the following counter-arguments:

(1) The notice requirement nds basis not only in the Labor Code but, more important, in the due process
clause of the Constitution.

(2) Consequently, when the employee is dismissed without due process, the legal effect is an illegal
dismissal and the appropriate sanction is full back wages plus reinstatement, not merely full back wages. It
is jurisprudentially settled, as I will show presently, that when procedural due process is violated, the
proceedings in this case, the dismissal will be voided, and the parties will have to be returned to their
status quo ante; that is, the employee will have to be given back his old job and paid all benets as if he were
never dismissed.

(3) In any event, contrary to Mr. Justice Mendoza's premise, even the Labor Code expressly grants the
dismissed employee not only the right to be notied but also the right to be heard.

In short, when an employee is dismissed without notice and hearing, the effect is an illegal dismissal and the
appropriate reliefs are reinstatement and full back wages. In ruling that the dismissal should be upheld, the Court
majority has virtually rendered nugatory the employee's right to due process as mandated by law and the
Constitution. It implicitly allows the employer to simply ignore such right and to just pay the employee. While it
increases the payment to "full back wages," it doctrinally denigrates his right to due process to a mere statutory
right to notice.

Let me explain the foregoing by starting with a short background of our jurisprudence on the right to due process.

Without Due Process, the Proceedings Are Illegal

In the past, this Court has untiringly reiterated that there are two essential requisites for an employer's valid
termination of an employee's services: (1) a just5 or authorized6 cause and (2) due process.7 During the last ten
years, the Court has been quite rm in this doctrinal concept, but it has been less than consistent in declaring the
illegality of a dismissal when due process has not been observed. This is particularly noticeable in the relief
granted. Where there has been no just or authorized cause, the employee is awarded reinstatement or separation
pay, and back wages.8 If only the second requisite (due process) has not been fullled, the employee, as earlier
stated, is granted indemnity or damages amounting to a measly P1,000 up to P10,000.9

I respectfully submit that illegal dismissal results not only from the absence of a legal cause (enumerated in Arts.
282 to 284 of the Labor Code), but likewise from the failure to observe due process. Indeed, many are the cases,
labor or otherwise, in which acts violative of due process are unequivocally voided or declared illegal by the
Supreme Court. In Pepsi-Cola Bottling Co. v. NLRC,10 the Court categorically ruled that the failure of management to
comply with the requirements of due process made its judgment of dismissal "void and non-existent."
11
This Court in People v. Bocar emphatically made the following pronouncement, which has been reiterated in
several cases:12

The cardinal precept is that where there is a violation of basis constitutional rights, courts are ousted of their
jurisdiction. Thus the violation of the State's right to due process raises a serious jurisdictional issue
(Gumabon vs. Director of the Bureau of Prisons, L-30026, 37 SCRA 420 [Jan. 30, 1971]) which cannot be
glossed over or disregarded at will. Where the denial of the fundamental right of due process is apparent, a
decision rendered in disregarded of the right is void for lack of jurisdiction (Aducayen vs. Flores, L-30370,
[May 25, 1973] 51 SCRA 78; Shell Co. vs. Enage, L-30111-12, 49 SCRA 416 [Feb. 27, 1973]). Any judgment or
decision rendered notwithstanding such violation may be regarded as a "lawless thing, which can be treated
as an outlaw and slain at sight, or ignored wherever it exhibits its head" (Aducayen vs. Flores, supra).

In the earlier case Bacus v. Ople,13 this Court also nullied the then labor minister's clearance to terminate the
employment of company workers who had supposedly staged an illegal strike. The reason for this ruling was the
denial of sufcient opportunity for them to present their evidence and prove their case. The Court explained:14
 A mere nding of the illegality of a strike should not be automatically followed by a wholesale dismissal of
the strikers from their employment. What is more, the nding of the illegality of the strike by respondent
Minister of Labor and Employment is predicated on the evidence ascertained through an irregular procedure
conducted under the semblance of summary methods and speedy disposition of labor disputes involving
striking employees.

While it is true that administrative agencies exercising quasi-judicial functions are free from the rigidities of
procedure, it is equally well-settled in this jurisdiction that avoidance of such technicalities of law or
procedure in ascertaining objectively the facts in each case should not, however, cause a denial of due
process. The relative freedom of the labor arbiter from the rigidities of procedure cannot be invoked to evade
what was clearly emphasized in the landmark case of Ang Tibay v. Court of Industrial Relations that all
administrative bodies cannot ignore or disregard the fundamental and essential requirements of due
process.

In the said case, the respondent company was ordered to reinstate the dismissed workers, pending a hearing
"giving them the opportunity to be heard and present their evidence."

In Philippine National Bank v. Apalisok,15 Primitivo Virtudazo, an employee of PNB, was served a Memorandum
stating the nding against him of a prima facie case for dishonesty and violation of bank rules and regulations. He
submitted his Answer denying the charges and explaining his defenses.

Later, two personnel examiners of the bank conducted a fact-nding investigation. They stressed to him that a
formal investigation would follow, in which he could confront and examine the witnesses for the bank, as well as
present his own. What followed, however, was a Memorandum notifying him that he had been found guilty of the
charges and that he was being dismissed. After several futile attempts to secure a copy of the Decision rendered
against him, he instituted against PNB a Complaint for illegal dismissal and prayed for reinstatement and damages.

The trial court held that Virtudazo had been deprived of his rights to be formally investigated and to cross-examine
the witnesses. This Court sustained the trial court, stating resolutely: "The proceedings having been conducted
without according to Virtudazo the "cardinal primary rights of due process" guaranteed to every party in an
administrative or quasi-judicial proceeding, said proceedings must be pronounced null and void."16

Also in Fabella v. Court of Appeals,17 this Court declared the dismissal of the schoolteachers illegal, because the
administrative body that heard the charges against them had not afforded them their right to procedural due
process. The proceedings were declared void, and the orders for their dismissal set aside. We unqualiedly
reinstated the schoolteachers, to whom we awarded all monetary benets that had accrued to them during the
period of their unjustied suspension or dismissal.

In People v. San Diego,18 People v. Sola,19 People v. Dactrdao,20 People v. Calo Jr.21 and People v. Burgos,22 this Court
similarly voided the trial court's grant of bail to the accused upon a nding that the prosecution had been deprived
of procedural due process.

In People v. Sevilleno,23 the Court noted that the trial judge "hardly satised the requisite searching inquiry" due the
accused when he pleaded guilty to the capital offense he had been charged with. We thus concluded that "the
accused was not properly accorded his fundamental right to be informed of the precise nature of the accusation
leveled against him." Because of the nonobservance of "the fundamental requirements of fairness and due
process," the appealed Decision was annulled and set aside, and the case was remanded for the proper
arraignment and trial of the accused.

Recently, the Court vacated its earlier Decision24 in People v. Parazo25 upon realizing that the accused "a deaf-
mute, a mental retardate, whose mental age [was] only seven (7) years and nine (9) months, and with low IQ of 60
only" had not been ably assisted by a sign language expert during his arraignment and trial. Citing People v.
Crisologo,26 we ruled that the accused had been deprived of "a full and fair trial and a reasonable opportunity to
defend himself." He had in effect been denied his fundamental right to due process of law. Hence, we set aside the
trial proceedings and granted the accused a re-arraignment and a retrial.

Of late, we also set aside a Comelec Resolution disallowing the use by a candidate of a certain nickname for the
purpose of her election candidacy. The Resolution was issued pursuant to a letter-petition which was passed upon
by the Comelec without affording the candidate the opportunity to explain her side and to counter the allegations in
said letter-petition. In invalidating the said Resolution, we again underscored the necessity of the observance of the
twin requirements of notice and hearing before any decision can be validly rendered in a case.27

Clearly deducible from our extant jurisprudence is that the denial of a person's fundamental right to due process
amounts to the illegality of the proceedings against him. Consequently, he is brought back to his status quo ante,
not merely awarded nominal damages or indemnity.

Our labor force deserves no less. Indeed, the State recognizes it as its primary social economic force,28 to which it
is constitutionally mandated to afford full protection.29 Yet, refusing to declare the illegality of dismissals without
due process, we have continued to impose upon the erring employer the simplistic penalty of paying indemnity
only. Hence, I submit that it is time for us to denounce these dismissals as null and void and to grant our workers
these proper reliefs: (1) the declaration that the termination or dismissal is illegal and unconstitutional and (2) the
reinstatement of the employee plus full back wages. The present ruling of the Court is manifestly inconsistent with
existing prudence which holds that proceedings held without notice and hearing are null and void, since they
amount to a violation of due process, and therefore bring back the parties to the status quo ante.
Exception: When Due Process Is Impractical and Futile

I am fully aware that in a long line of cases starting with Wenphil v. NLRC,30 the Court has held: where there is just
cause for the dismissal of an employee but the employer fails to follow the requirements of procedural due
process, the former is not entitled to back wages, reinstatement (or separation pay in case reinstatement is no
longer feasible) or other benets. Instead, the employee is granted an indemnity (or penalty or damages) ranging
from P1,00031 to as much as P10,000,32 depending on the circumstances of the case and the gravity of the
employer's omission. Since then, Wenphil has perfunctorily been applied in most subsequent cases33 involving a
violation of due process (although just cause has been duly proven), without regard for the peculiar factual milieu
of each case. Indemnity or damages has become an easy substitute for due process.

Be it remembered, however, that the facts in Wenphil clearly showed the impracticality and the futility of observing
the procedure laid down by law and by the Constitution for terminating employment. The employee involved therein
appeared to have exhibited a violent temper and caused trouble during ofce hours. In an altercation with a co-
employee, he "slapped [the latter's] cap, stepped on his foot and picked up the ice scooper and brandished it against
[him]." When summoned by the assistant manager, the employee "shouted and uttered profane words" instead of
giving an explanation. He was caught virtually in flagrante delicto in the presence of many people. Under the
circumstances action was necessary to preserve order and discipline, as well as to safeguard the customers'
condence in the employer's business a fastfood chain catering to the general public where courtesy is a prized
virtue.

However, in most of the succeeding cases, including the present one before us in which the petitioner was
dismissed on the very day he was served notice, there were ample opportunities for the employers to observe the
requisites of due process. There were no exigencies that called for immediate response. And yet, Wenphil was
instantly invoked and due process brushed aside.

I believe that the price that the Court has set for the infringement of the fundamental right to due process is too
insignicant, too niggardly, and sometimes even too late. I believe that imposing a stiffer sanction is the only way to
emphasize to employers the extreme importance of the right to due process in our democratic system. Such right
is too sacred to be taken for granted or glossed over in a cavalier fashion. To hold otherwise, as by simply imposing
an indemnity or even "full back wages," is to allow the rich and powerful to virtually purchase and to thereby stifle a
constitutional right granted to the poor and marginalized.

It may be asked: If the employee is guilty anyway, what difference would it make if he is red without due process?
By the same token, it may be asked: If in the end, after due hearing, a criminal offender is found guilty anyway, what
difference would it make if he is simply penalized immediately without the trouble and the expense of trial? The
absurdity of this argument is too apparent to deserve further discourse.34

Worker's Right to Notice Is Constitutional, Not Merely Statutory

According to the ponencia of Mr. Justice Mendoza, the "violation of the notice requirement cannot be considered a
denial of due process resulting in the nullity of the employee's dismissal or lay-off." He argues that the due process
clause of the Constitution may be used against the government only. Since the Labor Code does not accord
employees the right to a hearing, ergo, he concludes, they do not have the right to due process.

I disagree. True, as pointed out by Mr. Justice Mendoza, traditional doctrine holds that constitutional rights may be
invoked only against the State. This is because in the past, only the State was in a position to violate these rights,
including the due process clause. However, with the advent of liberalization, deregulation and privatization, the
State tended to cede some of its powers to the "market forces." Hence, corporate behemoths and even individuals
may now be sources of abuses and threats to human rights and liberties. I believe, therefore, that such traditional
doctrine should be modied to enable the judiciary to cope with these new paradigms and to continue protecting
the people from new forms of abuses.34 -a

Indeed the employee is entitled to due process not because of the Labor code, but because of the Constitution.
Elementary is the doctrine that constitutional provisions are deemed written into every statute, contract or
undertaking. Worth noting is that "[o]ne's employment, profession, trade or calling is a property right within the
protection of the constitutional guaranty of due process of law."35

In a long line of cases involving judicial, quasi-judicial and administrative proceedings, some of which I
summarized earlier, the Court has held that the twin requirements of notice and hearing (or, at the very least, an
opportunity to be heard) constitute the essential elements of due process. In labor proceedings, both are the
conditio sine qua non for a dismissal to be validly effected.36 The perceptive Justice Irene Cortes has aptly stated:
"One cannot go without the other, for otherwise the termination would, in the eyes of the law, be illegal."37

Even the Labor Code Grants the Right to a Hearing

Besides, it is really inaccurate to say that the Labor Code grants "notice alone" to employees being dismissed due to
an authorized cause. Article 277 (b)38 of the said Code explicitly provides that the termination of employment by the
employer is "subject to the constitutional right of workers to security of tenure[;] . . . without prejudice to the
requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is
sought to be terminated a written notice containing a statement of the causes for termination and shall afford the
latter ample opportunity to be heard . . . ." Signicantly, the provision requires the employer "to afford [the employee]
ample opportunity to be heard" when the termination is due to a "just and authorized cause." I submit that this
provision on "ample opportunity to be heard" applies to dismissals under Articles 282, 283 and 284 of the Labor
Code.

In addition, to say that the termination is "simply ineffectual" for failure to comply with the 30-day written notice
and, at the same time, to conclude that it has "legal effect" appears to be contradictory. Ineffectual means "having
no legal force."39 If a dismissal has no legal force or effect, the consequence should be the reinstatement of the
dismissed employee and the grant of full back wages thereto, as provided by law not the latter only. Limiting the
consequence merely to the payment of full back wages has no legal or statutory basis. No provision in the Labor
Code or any other law authorizes such limitation of sanction, which Mr. Justice Mendoza advocates.

The majority contends that it is not fair to reinstate the employee, because the employer should not be forces to
accommodate an unwanted worker. I believe however that it is not the Court that forces the employer to rehire the
worker. By violating the latter's constitutional right to due process, the former brings this sanction upon itself. Is it
unfair to imprison a criminal? No! By violating the law, one brings the penal sanction upon oneself. There is nothing
unfair or unusual about this inevitable chain of cause and effect, of crime and punishment, of violation and
sanction.

Due Process Begins With Each of Us

To repeat, due process begins with the employer, not with the labor tribunals. An objective reading of the Bill of
Rights clearly shows that the due process protection is not limited to government action alone. The Constitution
does not say that the right cannot be claimed against private individuals and entities. Thus, in PNB v. Apalisok,
which I cited earlier, this Court voided the proceedings conducted by petitioner bank because of its failure to
observe Apalisok's right to due process.

Truly, justice is dispensed not just by the courts and quasi-judicial bodies like public respondent here. The
administration of justice begins with each of us, in our everyday dealings with one another and, as in this case, in
the employers' affording their employees the right to be heard. If we, as a people and as individuals, cannot or will
not deign to act with justice and render unto everyone his or her due in little, everyday things, can we honestly hope
and seriously expect to do so when monumental, life-or-death issues are at stake? Unless each one is committed to
a faithful observance of day-to-day fundamental rights, our ideal of a just society can never be approximated, not to
say attained.

In the nal analysis, what is involved here is not simply the amount of monetary award, whether insignicant or
substantial; whether termed indemnity, penalty or "full back wages." Neither is it merely a matter of respect for
workers' rights or adequate protection of labor. The bottom line is really the constitutionally granted right to due
process. And due process is the very essence of justice itself. Where the rule of law is the bedrock of our free
society, justice is its very lifeblood. Denial of due process is thus no less than a denial of justice itself.

In Addition to Reinstatement and Back Wages, Damages May Be Awarded

One last point. Justice Vitug argues in his Separate Opinion that the nonobservance of the prescribed notices "can
verily entitle the employee to an award of damages but . . . not to the extent of rendering outrightly illegal that
dismissal or lay-off . . . ." I, of course, disagree with him insofar as he denies the illegality of the dismissal, because
as I already explained, a termination without due process is unconstitutional and illegal. But I do agree that, where
the employee proves the presence of facts showing liability for damages (moral, exemplary, etc.) as provided under
the Civil Code, the employee could be entitled to such award in addition to reinstatement and back wages. For
instance, where the illegal dismissal has caused the employee "physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury" due to the bad
faith of the employer, an award for moral damages would be proper, in addition to reinstatement and back wages.

Summary

To conclude, I believe that even if there may be a just or an authorized cause for termination but due process is
absent, the dismissal proceedings must be declared null and void. The dismissal should still be branded as illegal.
Consequently, the employee must be reinstated and given full back wages.

On the other hand, there is an exception. The employer can adequately prove that under the peculiar circumstances
of the case, there was no opportunity to comply with due process requirements; or doing so would have been
impractical or gravely adverse to the employer, as when the employee is caught in flagrante delicto. Under any of
these circumstances, the dismissal will not be illegal and no award may properly be granted. Nevertheless, as a
measure of compassion, the employee may be given a nominal sum depending on the circumstances, pursuant to
Article 2221 of the Civil Code.

Depending on the facts of each case, damages as provided under applicable articles of the Civil Code may
additionally be awarded.

WHEREFORE, I vote to GRANT the petition. Ruben Serrano should be REINSTATED and PAID FULL BACK WAGES
from date of termination until actual reinstatement, plus all benets he would have received as if he were never
dismissed.
Footnotes
1
TSN of testimony of petitioner, pp. 24, 76-78, April 24, 1992.
2
Petitioner's Position Paper, Annex C; Records, p. 19.
3
Id., Annex B; id., p. 21.
4
Records, p. 2.
5
Decision, dated April 30, 1993, of Labor Arbiter Pablo C. Espiritu. Petition, Annex A; Rollo, p. 30.
6
Id., pp. 35-36.
7
Petition, p. 10; id., p. 16.
8
21 SCRA 652 (1992).
9
Id., at 662.
10
G.R. No. 131108, March 25, 1999.
11
Shell Oil Workers Union v. Shell Company of the Philippines, Ltd., 39 SCRA 276, 284-285 (1971).
12
Asian Alcohol Corporation v. National Labor Relations Commission, G.R. No. 131108, March 25, 1999.
13
TSN, p. 61, April 24, 1992.
14
CONST., ART. XIII, 3.
15
E.g., Aurora Land Projects Corporation v. NLRC., 266 SCRA 48 (1997).
16
248 SCRA 532 (1995).
17
This provision reads:

Termination by employer. An employer may terminate an employment for any of the following
causes.

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his 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 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.

18
Bk. VI, Rule 1, of the Omnibus Rules and Regulations to Implement the Labor Code provides in pertinent
parts:

Sec. 2. Security of tenure . . . .

(d) In all cases of termination of employment, the following standards of due process shall be
substantially observed.

For termination of employment based on just causes as dened in Article 282 of the Labor
Code:

(i) A written notice served on the employee specifying the ground or grounds for
termination, and giving said employee reasonable opportunity within which to explain his
side.

(ii) A hearing or conference during which the employee concerned, with the assistance of
counsel if he so desires, is given opportunity to respond to the charge, present his
evidence, or rebut the evidence presented against him.

(iii) 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.

For termination of employment as dened in Article 283 of the Labor Code, the requirement of
due process shall be deemed complied with upon service of a written notice to the employee
and the appropriate Regional Ofce of the Department of Labor and Employment at least thirty
days before effectivity of the termination, specifying the ground or grounds for termination . . .

xxxxxxxxx
19
Sebuguero v. NLRC, 248 SCRA at 547.
20
170 SCRA 69 (1989).
21
Id., at 75-76.
22
E.g., Aurelio v. NLRC, 221 SCRA 432 (1993) (dismissal of a managerial employee for breach of trust);
Rubberworld (Phils.), Inc. v. NLRC, 183 SCRA 421 (1990) (dismissal for absenteeism, leaving the work place
without notice, tampering with machines); Shoemart, Inc. v. NLRC, 176 SCRA 385 (1989) (dismissal for
abandonment of work).
23
Sebuguero v. NLRC, 248 SCRA 536 (1995) (termination of employment due to retrenchment).
24
E.g., Worldwide papermills, Inc. v. NLRC, 244 SCRA 125 (1995) (dismissal for gross and habitual neglect of
duties).
25
E.g., Reta v. NLRC, 232 SCRA 613 (1994) (dismissal for negligence and insubordination).
26
110 Phil. 113, 118 (1960).
27
138 SCRA 166, 170 (1985).
28
Art. 302 of the Code of Commerce provided:

In cases in which no special time is xed in the contracts of service, any one of the parties thereto may
dissolve it, advising the other party thereof one month in advance.

The factory or shop clerk shall be entitled, in such case, to the salary due for said month.
29
R.A. No. 1052, as amended by R.A. No. 1787, provide:

Sec. 1. In cases of employment without a determine period, in a commercial, industrial, or agricultural

establishment or enterprises, 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.

The employer, upon whom no such notice was served in case of termination of employment without
just cause shall be entitled to compensation from the date of termination of his employment in an
amount equivalent to his salaries or wages corresponding to the required period of notice.
30
Abe v. Foster Wheeler Corp. 110 Phil. 198 (1960); Malate Taxicab and Garage, Inc. v. CIR, 99 Phil. 41 (1956).
31
71 SCRA 470, 480 (1976).
32
77 SCRA 321 (1977).
33
CIVIL CODE, ART. 19.
34
Art. 1191: "The power to rescind obligations is implied in reciprocal ones, in case one of the obligors
should not comply with what is incumbent upon him. . . . .

Art. 1592: "In the sale of immovable property, even though it may have been stipulated that upon
failure to pay the price at the time agreed upon the rescission of the contract shall of right take place,
the vendee may pay, even after the expiration of the period, as long as no demand for rescission of the
contract has been made upon him either judicially or by a notarial act. After the demand, the court may
not grant him a new term.
35
De la Cruz v. Legaspi, 98 Phil. 43 (1955); Taguba v. Vda. de Leon, 132 SCRA 722 (1984).
36
See Maximo v. Fabian, G.R. No. L-8015, December 23, 1955, (unpub.), 98 Phil. 989.
37
Emphasis added.
 38
Art. 285 reads:

Termination by employee. (a) An employee may terminate without just cause the employee-employer
relationship by serving a written notice on the employer at least one (1) month in advance. The
employer upon whom no such notice was served may hold the employee liable for damages.

(b) An employee may put an end to the relationship without serving any notice on the employer for any
of the following just causes:

1. Serious insult by the employer of his representative on the honor and person of the employee;

2. Inhuman and unbearable treatment accorded the employee by the employer or his
representative;

3. Commission of a crime or offense by the employer or his representative against the person of
the employee or any of the immediate members of his family; and

4. Other causes analogous to any of the foregoing.

39
210 SCRA 277 (1992).
40
Art, II, 18.
41
Id., 20.
42
Art. XIII, 3.
43
Manila Trading and Supply Co. v. Zulueta, 69 Phil, 485, 487 (1940) (per Laurel, J.) Accord, Villanueva v.
NLRC, 293 SCRA 259 (1998); DI Security and General Services, Inc. v. NLRC, 264 SCRA 458 (1996); Flores v.
NLRC, 256 SCRA 735 (1996); San Miguel Corporation v. NLRC, 218 SCRA 293 (1993); Colgate Palmolive
Philippines, Inc. v. Ople, 163 SCRA 323 (1988).

BELLOSILLO, J., separate opinion;

1
G.R. No. 130866 16 September 1998, 295 SCRA 494.
2
Exh. "B," Records, p. 21.
3
Rollo, p. 63.
4
Sebuguero v. National Labor Relations Commission, G.R. No. 115395, 27 September 1995, 248 SCRA 536;
Almodiel v. National Labor Relations Commission, G.R. No. 100641, 14 June 1993, 223 SCRA 341.
5
De Ocampo v. National Labor Relations Commission, G.R. No. 101539, 4 September 1992, 213 SCRA 652,
662.
6
G.R. No. 73287, 18 May 1987, 149 SCRA 641.
7
Art. XIII, Sec. 3, 1987 Constitution, reiterated in Art. 3, Labor Code.
8
Art. 3, Labor Code.
9
Alcantara, Samson S., Reviewer in Labor and Social Legislation, 1993 Ed., p. 347.
10
Art. 227, Labor Code.
11
Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the
employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operation of the establishment or undertaking . . . by serving a
written notice on the worker and the Ministry of Labor and employment at least one (1) month before the
intended date thereof. . . .
12
Sec. 1. Art. III, 1987 Constitution.
13
Fernando, Enrique M., The Bill of Rights, 1972, ed., p. 71.
14
Id., p. 78.
15
Id., pp. 80-81.
16
Id., p. 94.
 17
Id., p. 96.
18
69 Phil. 635 (1940).
19
G.R. No. 117565, 18 November 1997, 282 SCRA 146-147.
20
G.R. No. 80587, 8 February 1989, 170 SCRA 69.
21
G.R. No. 115394, 27 September 1995, 248 SCRA 535.
22
G.R. No. 122666, 19 June 1997, 274 SCRA 379.
23
G.R. No. 116473, 12 September 1997, 279 SCRA 45.
24
Shoemart, Inc. v. NLRC, G.R. No. 74229, 11 August 1989, 176 SCRA 385 The employee was found to
have abandoned his job but for failure to observe the notice requirement, the employer was ned P1,000.00;
Pacic Mills, Inc. v. Alonzo, G.R. No. 78090, 26 July 1991, 199 SCRA 617 The employee violated company
rules and regulations but because of procedural lapse the company was ned P1,000.00; Aurelio v. NLRC,
G.R. No. 99034, 12 April 1993, 221 SCRA 432 The managerial employee breached the trust and condence
of his employer but for failure to observe the notice requirement the company was ned P1,000.00;
Worldwide Papermills Inc. v. NLRC, G.R. No. 113081, 12 May 1995, 244 SCRA 125 The employee was
found guilty of gross and habitual neglect of his duties and of excessive absences. For failure to comply with
the notice requirement the company was ned P5,000.00; Reta v. NLRC, G.R. No. 112100, 27 May 1994, 232
SCRA 613 The employee was guilty of inefciency negligence and insubordination but the company was
ned P10,000.00 for failure to observe the notice requirement. 1wphi1.nt

25
Sebuguero v. NLRC, G.R. No. 115394, 27 September 1995, 248 SCRA 532 The employees were
retrenched in order to prevent further losses but the company failed to observe the notice requirement, hence
was ned P2,000.00 for each employee; Balbalec et al. v. NLRC, G.R. No. 107756, 19 December 1995, 251
SCRA 398 The employees were retrenched to prevent business losses but the company was ned
P5,000.00 for each employee for failure to observe the notice requirement.
26
See Note 21.

PUNO, J., dissenting opinion;

1
Schwartz, Administrative Law, 1991 ed., p. 224 citing Painter v. Liverpool Gas Co., 3 Ad. & E I. 433, 449, 11
Eng. Rep. 478 (K. B. 1836).
2
Kingsize Manufacturing Corp. vs. NLRC, 238 SCRA 349 (1994).
3
Ibid.
4
170 SCRA 69.
5
248 SCRA 532, 545 (1995).
6
Ibid., p. 546.
7
Op cit., p. 76.
8
Op cit., pp. 74-75.
9
Op cit., p. 76.
10
TSN, August 4, 1992, pp. 30, 37-38, 42-49.
11
A fth authorized cause is "disease of the employee" provided in Article 284 of the Code.
12
Sebuguero, supra.
13
International Hardware, Inc. v. National Labor Relations Commission, 176 SCRA 256, 259 (1989).
14
Sebuguero v. NLRC, supra.
15
Wiltshire File Co. v. NLRC, 193 SCRA 665, 676 (1991).
16
Balbalec v. NLRC, 251 SCRA 398, 406 (1995).
17
110 Phil 113 (1960).
18
Schwartz, op cit., pp. 273-274.
 19
Supra.
20
See also JGB and Associates, Inc. vs. NLRC, 254 SCRA 457 (1996); Philippine Savings Bank v. NLRC, 261
SCRA 409 (1996); Pasudeco Inc. vs. NLRC, 272 SCRA 737 (1997); P.I. Manpower, Inc. vs. NLRC, 267 SCRA
451 (1997); Canura v. NLRC, 279 SCRA 45 (1997); International Pharmaceuticals, Inc. vs. NLRC, 287 SCRA
213 (1998); Mabuhay Development Industries vs. NLRC, 288 SCRA 1 (1998), all ponencias of Mr. Justice
Mendoza.
21
Art. 283. Termination by employer. An employer may terminate an employment without a denite period
for any of the following just causes:

(a) The closing or cessation of operation of the establishment or enterprise, or where the employer has
to reduce his work force by more then one-half (1/2) due to serious business reverses, unless the
closing is for the purpose of circumventing the provisions of this chapter;

(b) Serious misconduct or willful disobedience by the employee of the orders of his employer or
representative in connection with his work;

(c) Gross and habitual neglect by the employee of his duties;

(d) Fraud or willful breach by the employee of the trust reposed in him by his employer or
representative;

(e) Commission of a crime or offense by the employee against the person of his employer or any
immediate member of his family or representative; and

(f) Other causes analogous to the foregoing.

22
Art. 284. Reduction of personnel. The termination of employment of any employee due to the installation
of labor saving devices, redundancy, retrenchment to prevent losses, and other similar causes, shall entitle
the employee affected thereby to separation pay . . . .
23
Art. 285. Disease as a ground for termination. An employer may terminate the services of an employee
who have been found to be suffering from any disease and whose continued employment is prohibited by
law or is prejudicial to his health as well as to the health of his co-employees . . . .
24
The adjustment of the numbering of the Articles is due to the fact that there are two (2) Article 238.
25
71 SCRA 470 (1976).
26
92 Phil. 843 (1953).
27
International Hardware, Inc. vs. NLRC, 176 SCRA 256 (1989); Sebuguero v. NLRC, supra.
28
Concurring opinion in Ang Tibay et al. vs. Court of Industrial Relations, et al., 69 Phil. 635 (1940).

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

1
Art. 282. Termination by employer. An employer may terminate an employment for any of the following
causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his 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 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.

2
Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the
employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operation of the establishment or undertaking unless the
closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the
workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof.
In case of termination due to the installation of labor saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1)
month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in
cases of closures or cessation of operations of establishment or undertaking not due to serious business
 losses or nancial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half
(1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be
considered one (1) whole year.
3
Art. 284. Disease as ground for termination. An employer may terminate the services of an employee who
has been found to be suffering from any disease and whose continued employment is prohibited by law or is
prejudicial to his health as well as to the health of his co-employees: Provided, That he is paid separation pay
equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year of service,
whichever is greater, a fraction of at least six (6) months being considered as one (1) whole year.
4
See San Miguel Corporation vs. NLRC, 255 SCRA 580. Section 7, Rule I, Book VI, of the Omnibus Rules
Implementing the Labor Code provides:

Sec. 7. Termination of employment by employer. The just causes for terminating the services of an
employee shall be those provided in Article 282 of the Code. The separation from work of an employee
for a just cause does not entitle him to the termination pay provided in Code, without prejudice,
however, to whatever rights, benets and privileges he may have under the applicable individual or
collective bargaining agreement with the employer or voluntary employer policy or practice.
5
See Footnote 2.
6
Sec. 1, Rule XXIII, of the Rules Implementing the Labor Code clearly states that "(i)n cases of regular
employment, the employer shall not terminate the services of an employee except for just or authorized
causes as provided by law, and subject to the requirements of due process.

Sec. 2, I, of the same Rule provides that in case of termination of employment based on just causes
under Article 282 of the Labor Code, is it required that there be

(a) A written notice served on the employee specifying the ground or grounds for termination,
and giving to said employee reasonable opportunity within which to explain his side;

(b) A hearing or conference during which the employee concerned, with the assistance of
counsel if the employee so desires, is given opportunity to respond to the charge, present his
evidence or rebut the evidence presented against him; and

(c) A written notice of termination served on the employee indicating that upon due
consideration of all the circumstances, grounds have been established to justify his termination.

In cases of termination based on authorized causes under Article 283 of the Labor Code, Section 2, II,
of the same Rule mandates that there be "a written notice to the employee and the appropriate
Regional Ofce of the Department (of Labor and Employment) at least thirty days before the effectivity
of the termination," specifying the ground/s therefor.
7
See MGG Marine Services, Inc. vs. NLRC, 259 SCRA 664.

PANGANIBAN, J., separate opinion;

1
See Panganiban, Battles in the Supreme Court, 1998 ed., p. 155 et seq.
2
259 SCRA 665, July 29, 1996.
3
283 SCRA 242, December 15, 1997. In that case, I proposed to grant separation pay in lieu of reinstatement
because, by the employee's acts, he had made reinstatement improper, a fact not present in the instant case.
4
296 SCRA 283, September 28, 1998.
5
Art. 282 of the Labor Code provides:

Art. 282. Termination by employer. An employer may terminate an employment for any of the
following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his 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 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.

6
Arts. 283 & 284 provide:

Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the
employment of any employee due to the installation of labor saving devices, redundancy, retrenchment
to prevent losses or the closing or cessation or operation of the establishment or undertaking unless
the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice
on the workers and the [Department] of Labor and Employment at least one (1) month before the
intended date thereof. In case of termination due to the installation of labor saving devices or
redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his
one (1) month pay or to at least one (1) month pay for every year of service whichever is higher. In
case of retrenchment to prevent losses and in cases of closures or cessation of operations of
establishments or undertaking not due to serious business losses or nancial reverses, the separation
pay shall be equivalent to one (1) month pay or to as least one-half (1/2) month pay for every year of
service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole
year.

Art. 284. Disease as a ground for termination. An employer may terminate the services of an
employee who has been found to be suffering from any disease and whose continued employment is
prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Provided,
That he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2) month
salary for every year of service, whichever is greater a fraction of at least six (6) months being
considered as one (1) whole year.
7
Mapalo v. NLRC, 233 SCRA 266, June 17, 1994; Ala Mode Garments, Inc. v. NLRC, 268 SCRA 497, February
17, 1997; Pizza Hut/Progressive Development Corp. v. NLRC, 252 SCRA 531, January 29, 1996; MGG Marine
Services, Inc. v. NLRC, 259 SCRA 664, July 29, 1996; Ranises v. NLRC, 262 SCRA 671, September 24, 1996.
8
Conti v. NLRC, 271 SCRA 114, April 10, 1997; Alhambra Industries, Inc. v. NLRC, 238 SCRA 232, November
18, 1994; JBG and Associates, Inc. v. NLRC, 254 SCRA 457, March 7, 1996; Samillano v. NLRC, 265 SCRA
788, December 23, 1996.
9
Alhambra Industries, Inc. v. NLRC, ibid.; Segismundo v. NLRC, 239 SCRA 167, December 13, 1994;
Sebuguero v. NLRC, 248 SCRA 532, September 27, 1995; Wenphil Corp. v. NLRC, 170 SCRA 69, February 8,
1989.
10
210 SCRA 277, 286, June 23, 1992, per Gutierrez Jr., J.
11
138 SCRA 166, 170-171, August 16, 1985, per Makasiar, CJ.
12
Among those are Galman v. Sandiganbayan, 144 SCRA 43, 87, September 12, 1986; People v. Albano, 163
SCRA 511, July 26, 1988; Saldana v. Court of Appeals, 190 SCRA 396, 403, October 11, 1990; Paulin v.
Gimenez, 217 SCRA 386, 392, January 21, 1993.
13
132 SCRA 690, October 23, 1984, per Cuevas, J.
14
Ibid., p. 703.
15
199 SCRA 92, July 12, 1991, per Narvasa, J., (later CJ).
16
Ibid., p. 101.
17
282 SCRA 256, November 28, 1997.
18
26 SCRA 252, December 24, 1968.
19
103 SCRA 393, March 17, 1981.
20
170 SCRA 489, February 21, 1989.
21
186 SCRA 620, June 18, 1990.
22
200 SCRA 67, August 2, 1991.
23
G.R. No. 129058, March 29, 1999, per Bellosillo, J.
24
G.R. No, 121176, May 14, 1997.
25
July 8, 1999 Resolution on the Motion for Reconsideration, per Purisima, J.
26
150 SCRA 653, 656, June 17, 1987, per Padilla, J.
27
Villasora v. Comelec, G.R. No. 133927, November 29, 1999.
 28
18, Art II, 1987 Constitution.
29
3, Art. XIII, ibid.
30
170 SCRA 69, February 8, 1989, per Gancayco, J.
31
In Wenphil Corp. v. NLRC, ibid.; Sampaguita Garments Corp. v. NLRC, 233 SCRA 260, June 17, 1994;
Villarama v. NLRC, 236 SCRA 280, September 2, 1994; Rubberworld (Phils.), Inc. v. NLRC, 183 SCRA 421,
March 21, 1990; Kwikway Engineering Works v. NLRC, 195 SCRA 526, March 22, 1991, and several other
cases.
32
In Reta v. NLRC, 232 SCRA 613, May 27, 1994; and Alhambra Industries, Inc. v. NLRC, 238 SCRA 232,
November 18, 1994.
33
Seahorse Maritime Corp. v. NLRC, 173 SCRA 390, May 15, 1989; Rubberworld (Phils.), Inc. v. NLRC, supra;
Cario v. NLRC, 185 SCRA 177, May 8, 1990; Great Pacic Life Assurance Corp. v. NLRC, 187 SCRA 694, July
23, 1990; Cathedral School of Technology v. NLRC, 214 SCRA 551, October 13, 1992; Aurelio v. NLRC, 221
SCRA 432, April 12, 1993; Sampaguita Garments Corp. v. NLRC, 233 SCRA 260, June 17, 1994; Villarama v.
NLRC, supra.
34
See Concurring and Dissenting Opinion in Better Buildings, Inc. v. NLRC, 283 SCRA 242, 256, December 15,
1997.

34-a See Panganiban, Leadership by Example, 1999 ed., pp. 60-61.

35
Wallem Maritime Services, Inc. v. NLRC, 263 SCRA 174, October 15, 1996; per Romero, J. Bernas, The 1987
Constitution of the Republic of the Philippines: A Commentary, 1996 ed., p. 101.
36
RCPI v. NLRC, 223 SCRA 656, June 25, 1993; Samillano v. NLRC, 265 SCRA 788, December 23, 1996.
37
San Miguel Corporation v. NLRC, 173 SCRA 314, May 12, 1989.

Art. 277. . . .

(b) Subject to the constitutional right of workers to security of tenure and their right to be protected
against dismissal except for a just and authorized cause and without prejudice to the requirement of
notice under Article 283 of this Code the employer shall furnish the worker whose employment is
sought to be terminated a written notice containing a statement of the causes for termination and
shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his
representative if he so desires in accordance with company rules and regulations promulgated
pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the
employer shall be without prejudice to the right of the worker to contest the validity or legality of his
dismissal by ling a complaint with the regional branch of the National Labor Relations Commission.
The burden of proving that the termination was for a valid or authorized cause shall rest on the
employer. The Secretary of the Department of Labor and Employment may suspend the effects of the
termination pending resolution of the dispute in the event of a prima facie nding by the appropriate
ofcial of the Department of Labor and Employment before whom such dispute is pending that the
termination may cause a serious labor dispute or is in implementation of a mass lay-off.
39
The New World Dictionary, Second College Ed (1974), denes effectual as "having legal force; valid." Thus,
ineffectual, being its opposite, means having no legal force or not valid.

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