Labor Relations Case Digests (A Compilation)
and
Comparison of Dismiss ‘Now, Pay Later’ Doctrines (Wenphil, Serrano, Agabon & Jaka Doctrines)
Submitted to: ATTY. RIZA LYN OCAMPO Labor Relations Professor School of Law University of San Jose-Recoletos
Submitted by: RON STEPHANE P. MAYLON Labor Relations Course (Sunday, 12:00NN-3:00PM)
March 23, 2014
Table of Contents GENERAL TEXTILE, INC. and EDGAR TOLENTINO vs. NLRC ........................................................................... 3 FEDERICO M. LEDESMA, JR. vs.
NLRC .......................................................................................................... 5 JONERI ESCOBIN vs. NLRC ............................................................................................................................. 8 BRENT SCHOOL INC. VS ZAMORA ............................................................................................................... 10 WENPHIL CORPORATION vs NLRC .............................................................................................................. 12 SERRANO VS NLRC ...................................................................................................................................... 14 AGABON VS. NLRC ...................................................................................................................................... 17 JAKA VS. NLRC ............................................................................................................................................. 19 Comparison of Dismiss ‘Now, Pay Later’ Doctrines .................................................................................... 21
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GENERAL TEXTILE, INC. and EDGAR TOLENTINO vs. NLRC FACTS: Private respondent Rodolfo Lopez was employed by petitioner Gentex Inc. as machine operator. Lopez fell ill, he was later diagnosed as suffering from moderately advanced pulmonary tuberculosis. He went on sick leave upon the advice of the company physician and was later granted by the Social Security System sickness benefits for 60 days, he went to Gentex with the intention of returning to work. He was instead told by the company physician to extend his leave for another 6 months. He was confined at the Quezon Institute. This fact was known to Gentex, as its personnel manager, petitioner Edgar Tolentino, accomplished Lopez' Medicare form. Tolentino, sent Lopez a Notice of Termination informing him of the termination of his employment "immediately upon receipt of this notice" on the ground that he had been absent without official leave. Lopez filed a complaint against Gentex and- Tolentino for illegal dismissal and for nonpayment of the thirteenth-month pay and service incentive leave for the year. In their defense, petitioners contended that Lopez abandoned work beginning September 17,1988. Labor Arbiter ordered the reinstatenent of Lopez with full backwages from the time his salary was witheld until his actual reinstatement, subject to his fitness for work. On appeal, NLRC ruled that as there was no abandonment, Lopez' dismissal on such ground was illegal. However, NLRC ruled that Lopez' reinstatement could not be forced upon Gentex, since there was showing that his pulmonary tuberculosis was already arrested.
ISSUE/S: Whether or not an employee has abandoned his work
HELD:
Section 8, Rule I, Book VI of the Rules to Implement the Labor Code, reads as follows: Disease as a ground for dismissal. — Where the employee suffers from a disease and his continued employment is prohibited by law or prejudicial to his health or to the health of his co-employees, the employer shall not terminate his employment unless there is a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of 6 months even with proper medical treatment . If the disease or ailment can be cured within the period, the employer shall not terminate the employee but shall ask the employee to take a leave. The employer shall reinstate such employee to his former position immediately upon the restoration of his normal health.
The preceding provision explicitly requires a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of six months even with proper medical treatment. There is no showing that such a certification was presented in the course of the proceedings before the Labor Arbiter and NLRC.
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Lopez is entitled to full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. We are also aware of the contingency that the illness of private respondent be certified by a competent public health authority as being of such nature or at such a stage that renders him physically unfit to return to work. In such a case, separation pay at the rate provided for in Article 284 must be paid private respondent, in addition to the backwages for his illegal dismissal.
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FEDERICO M. LEDESMA, JR. vs.
NLRC FACTS: Petitioner was employed as a service driver by the private respondent on probationary basis, he was required to report at private respondent’s training site in Dasmariñas, Cavite, under the direct supervision of its site administrator, Pablo Manolo de Leon. Petitioner filed a complaint against de Leon for allegedly abusing his authority as site, immoral conduct allegedly carried out within the private respondent’s premises. A copy of the complaint was duly received by private respondent’s Chief Accountant, Nita Azarcon. De Leon filed a written report against the petitioner addressed to private respondent’s VicePresident for Administration, Ty citing his suspected drug use. Private respondent’s Human Resource Manager, Cueva served a copy of a Notice to petitioner requiring him to explain within why no disciplinary action should be imposed on him instead he filed a complaint for illegal dismissal against private respondent before the Labor Arbiter. In his Position Paper, petitioner averred that in view of the complaint he filed against de Leon, the latter retaliated by falsely accusing petitioner as a drug user. Ty, however, instead of verifying the veracity of report, readily believed his allegations and together with Cueva, verbally dismissed him from service. Petitioner immediately went to St. Dominic Medical Center for a drug test and he was found negative for any drug substance. With his drug result on hand, he went back to private respondent’s main office to talk to Ty and Cueva and to show to them his drug test result, since his drug test proved that he was not guilty of the drug use charge against him, he decided to continue to work. He reported for work but he was no longer allowed to enter the training site for he was allegedly banned there from according to the guard on duty. Private respondent countered that petitioner was never dismissed from employment but merely served a Notice to Explain why no disciplinary action should be filed against him in view of the report that he was suspected of using illegal drugs. Instead of filing an answer, petitioner prematurely lodged a complaint for illegal dismissal against private respondent before the Labor Arbiter. Labor Arbiter rendered a Decision in favor of the petitioner declaring illegal his separation from employment. The Labor Arbiter, however, did not order petitioner’s reinstatement for the same was no longer practical, and only directed private respondent to pay petitioner backwages. Both parties questioned the Labor Arbiter’s Decision before the NLRC. Petitioner assailed the portion of the Labor Arbiter’s Decision denying his prayer for reinstatement, private respondent controverted the Labor Arbiter’s finding that petitioner was illegally dismissed from employment, and insisted that petitioner was never dismissed from his job but failed to report to work. NLRC granted the appeal raised by both parties and reversed the Labor Arbiter’s Decision. The NLRC declared that petitioner failed to establish the fact of dismissal for his claim that he was banned from entering the training site was rendered impossible by the fact that he was able to subsequently claim his salary and 13th month pay.
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Petitioner’s claim for reinstatement was, however, granted by the NLRC. The Motion for Reconsideration filed by petitioner was likewise denied by the NLRC in its Resolution. The Court of Appeals dismissed petitioner’s Petition for Certiorari and affirmed the NLRC decision giving more credence to private respondent’s stance that petitioner was not dismissed from employment, as it is more in accord with the evidence on record and the attendant circumstances of the instant case. Petitioner’s Motion for Reconsideration was denied by CA.
ISSUE/S: Whether or not CA subverted due process of law when it did not consider the evidence on record showing that there was no just cause for dismissal as petitioner is not a drug user and there is no evidence to support this ground for dismissal.
HELD: It is best to stress that the issues raised by petitioner in this instant petition are factual in nature which is not within the office of a Petition for Review. The reason for this rule is that, this Court is not a trier of facts and does not routinely undertake the re-examination of the evidence presented by the contending parties for the factual findings of the labor officials who have acquired expertise in their own fields are accorded not only respect but even finality, and are binding upon this Court. However, when the findings of the Labor Arbiter contradict those of the NLRC, departure from the general rule is warranted, and this Court must of necessity make an scrutiny and examine the records all over again including the evidence presented by the opposing parties to determine which findings should be preferred as more conformable with evidentiary facts. The Labor Arbiter found that the petitioner was illegally dismissed from employment warranting the payment of his backwages. The NLRC and the Court of Appeals found otherwise. In reversing the Labor Arbiter’s Decision, the NLRC underscored the settled evidentiary rule that before the burden of proof shifts to the employer to prove the validity of the employee’s dismissal, the employee must first sufficiently establish that he was indeed dismissed from employment. The petitioner, in the present case, failed to establish the fact of his dismissal. The NLRC did not give credence to petitioner’s allegation that he was banned by the private respondent from entering the workplace, opining that had it been true that petitioner was no longer allowed to enter the training site when he reported for work. Well-entrenched is the principle that in order to establish a case before judicial and quasiadministrative bodies, it is necessary that allegations must be supported by substantial evidence. In the present case, there is hardly any evidence on record so as to meet the quantum of evidence required, i.e., substantial evidence. Petitioner’s claim of illegal dismissal is supported by no other than his own bare, uncorroborated and, thus, self-serving allegations, which are also incoherent, inconsistent and contradictory. It is true that the Constitution affords full protection to labor, and that in light of this Constitutional mandate, we must be vigilant in striking down any attempt of the management
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to exploit or oppress the working class. However, it does not mean that we are bound to uphold the working class in every labor dispute brought before this Court for our resolution. The law in protecting the rights of the employees, authorizes neither oppression nor selfdestruction of the employer. It should be made clear that when the law tilts the scales of justice in favor of labor, it is in recognition of the inherent economic inequality between labor and management. The intent is to balance the scales of justice; to put the two parties on relatively equal positions.
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JONERI ESCOBIN vs. NLRC FACTS: PEFTOK Integrated Services, Inc., is a duly licensed watchman and protective agency while respondent UP-NDC Basilan Plantations, Inc. is a corporation duly organized in accordance with law, and the owner/possessor of lands principally planted to rubber, coconut, citrus, coffee, and other fruit trees in Lamitan, Province of Basilan. That complainants are bona fide members of the Basilan Security Force Association hired by PISI to work as guards in UP-NDC Basilan Plantation’s premises, for the purpose of guarding and protecting plantation property and installations from theft, pilferage, robbery, trespass and other unlawful acts by strangers or third persons, and plantation employees . Petitioners filed at the Regional Arbitration Branch No. 09 in Zamboanga City a Complaint against private respondents for illegal termination by way of constructive dismissal. After conciliation proceedings failed to settle the matter, the parties were ordered to submit their respective position papers. Labor Arbiter rendered a Decision in favor of petitioners, declaring the dismissal to be illegal for being without just cause. On appeal, Respondent Commission reversed the labor arbiter and denied Motion for reconsideration. ISSUE/S: Whether or not the NLRC acted with grave abuse of discretion in ruling that petitioners committed willful disobedience of lawful orders of their employer. Whether or not the NLRC acted with grave abuse of discretion in ruling that petitioners abandoned their work. Whether or not the NLRC acted with grave abuse of discretion in reversing the finding of the labor arbiter that petitioners were illegally dismissed by way of constructive dismissal. Whether or not the NLRC acted with grave abuse of discretion in denying recovery of backwages, separation pay, damages, and attorney’s fees in favor of petitioners.
HELD: I o o o o o o o
Respondent Commission committed grave abuse of discretion in holding that petitioners were dismissed for a just cause. The reasonableness and lawfulness of a rule, order or instruction depend on the circumstances availing in each case. Reasonableness pertains to the kind or character of directives and commands and to the manner in which they are made. In this case, the order to report to the Manila office fails to meet this standard. First, it was grossly inconvenient for petitioners, who were residents and heads of families residing in Basilan, to commute to Manila. Second, petitioners were not provided with funds to defray their transportation and living expenses. Third, private respondent argues that it sent transportation money to petitioners. However, the recipients of such funds are not parties in this case.
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o
o
o
II o o
o o
This contention is untenable. Abandonment, as a just and valid cause for dismissal, requires a deliberate, unjustified refusal of an employee to resume his work, coupled with a clear absence of any intention of returning to his work. No evidence was presented to establish that petitioners relinquished their jobs. Denying they abandoned their work, petitioners contend that it was private respondent agency which deserted them by failing to communicate with them for over two months, from February 1, 1991 to April 8, 1991
III o o
o
Fourth, no reason was given by private respondent company explaining why it had failed to inform petitioners of their specific security assignments prior to their departure from Basilan. This fact demonstrates that petitioners’ dismissal was not commensurate to their insubordination which, we reiterate, was neither willful nor intentional they very well knew that petitioners were not receiving any salary while they were on floating status and, thus, also knew that they would hardly be able to comply with the directive to report to Manila. In any event, dismissal was too harsh a penalty for an infraction which appears, under the circumstances, to be excusable.
No constructive dismissal. Constructive discharge is an involuntary resignation resorted to when continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank and/or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee. In this particular case, petitioners were not constructively dismissed; they were actually dismissed without just and valid cause.
IV o o o o o o o
o
The normal consequences of illegal dismissal are reinstatement and payment of backwages. These remedies give life to the workers’ constitutional right to security of tenure. Separation pay is generally not awarded except in instances where reinstatement is no longer feasible or appropriate, as in this case. As a substitute for immediate and continued reemployment, separation pay is meant to provide the employee during the period that he is looking for another employment. In this particular case, private respondent alleges that there is no assignment in Basilan or Zamboanga available to petitioners. Transfer to another post outside said areas would have only given rise to the same problems as those entailed by the original directive. Reinstatement presupposes that the previous position from which the employee had been removed still exists, or there is an unfilled position of a similar nature, more or less, as the one previously occupied by the employee. If no such position is available, reinstatement becomes a legal impossibility.
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BRENT SCHOOL INC. VS ZAMORA FACTS: Doroteo R. Alegre was engaged as athletic director by Brent School. The contract fixed a specific term for its existence, five (5) years, subsequent subsidiary agreements reiterated the same terms and conditions, including the expiry date, as those contained in the original contract. Three months before the expiration of the stipulated period, Alegre was given a copy of the report filed by Brent School with the Department of Labor advising of the termination of his services effective on July 16, 1976. The stated ground for the termination was "completion of contract, expiration of the definite period of employment." And a month or so later, on May 26, 1976, Alegre accepted the amount of P3,177.71, and signed a receipt therefor containing the phrase, "in full payment of services for the period May 16, to July 17, 1976 as full payment of contract." However, at the investigation conducted by a Labor Conciliator of said report of termination of his services, Alegre protested the announced termination of his employment. He argued that although his contract did stipulate that the same would terminate on July 17, 1976, since his services were necessary and desirable in the usual business of his employer, and his employment had lasted for five years, he had acquired the status of a regular employee and could not be removed except for valid cause. The Regional Director considered Brent School's report as an application for clearance to terminate employment (not a report of termination), and accepting the recommendation of the Labor Conciliator, refused to give such clearance and instead required the reinstatement of Alegre, as a "permanent employee," to his former position without loss of seniority rights and with full back wages. Brent School filed a motion for reconsideration. The Regional Director denied the motion and forwarded the case to the Secretary of Labor for review. The latter sustained the Regional Director. Brent appealed to the Office of the President. Again it was rebuffed. That Office dismissed its appeal for lack of merit and affirmed the Labor Secretary's decision, ruling that Alegre was a permanent employee who could not be dismissed except for just cause, and expiration of the employment contract was not one of the just causes provided in the Labor Code for termination of services. The School is now before this Court in a last attempt at vindication.
ISSUE/S: Whether or not Alegre’s contract of employment is subject to a term or he is deemed permanent and can be removed only upon just cause HELD: The employment contract between Brent School and Alegre was executed at a time when the Labor Code of the Philippines (P.D. 442) had not yet been promulgated.
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Indeed, the Code did not come into effect some 3 years after the perfection of the employment contract, and rights and obligations thereunder had arisen and been mutually observed and enforced. At that time before the advent of the Labor Code, there was no doubt whatever about the validity of term employment. It was impliedly but nonetheless clearly recognized by the Termination Pay Law, R.A. 1052, as amended by R.A. 1787. Basically, this statute provided that— In cases of employment, without a definite period, in a commercial, industrial, or agricultural establishment or enterprise, the employer or the employee may terminate at any time the employment with just cause; or without just cause in the case of an employee by serving written notice on the employer at least one month in advance, or in the case of an employer, by serving such notice to the employee at least one month in advance or one-half month for every year of service of the employee, whichever is longer, a fraction of at least six months being considered as one whole year. The employer, upon whom no such notice was served in case of termination of employment without just cause, may hold the employee liable for damages. The employee, upon whom no such notice was served in case of termination of employment without just cause, shall be entitled to compensation from the date of termination of his employment in an amount equivalent to his salaries or wages corresponding to the required period of notice. It is plain then that when the employment contract was signed between Brent School and Alegre it was perfectly legitimate for them to include in it a stipulation fixing the duration thereof Stipulations for a term were explicitly recognized as valid by this Court. It should have no application to instances where a fixed period of employment was agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter. Unless thus limited in its purview, the law would be made to apply to purposes other than those explicitly stated by its framers; it thus becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd and unintended consequence. Respondent Alegre's contract of employment with Brent School having lawfully terminated with and by reason of the expiration of the agreed term of period thereof, he is declared not entitled to reinstatement and the other relief awarded and confirmed on appeal.
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WENPHIL CORPORATION vs NLRC FACTS: Private respondent was hired by petitioner as a crew member at its Cubao Branch. He thereafter became the assistant head of the Backroom department of the same branch. On May 20, 1985 private respondent had an altercation with a co-employee, Job Barrameda, as a result of which he and Barrameda were suspended on the following morning and in the afternoon of the same day a memorandum was issued by the Operations Manager advising private respondent of his dismissal from the service in accordance with their Personnel Manual. The notice of dismissal was served on private respondent. Thus private respondent filed a complaint against petitioner for unfair labor practice, illegal suspension and illegal dismissal. After submitting their respective position papers to the Labor Arbiter and as the hearing could not be conducted due to repeated absence of counsel for respondent, the case was submitted for resolution. The decision was rendered by the Labor Arbiter by dismissing the complaint for lack of merit. Private respondent appealed to NLRC wherein in due course a decision was rendered setting aside the appealed decision and ordering the reinstatement of private respondent to his former position without loss of seniority and other related benefits and 1 year backwages without qualification and deduction. Hence the herein petition for certiorari with preliminary injunction and/or restraining order. The court issued a restraining order as prayed for in the petition enjoining the enforcement of the decision of public respondent ISSUE/S: Whether or not NLRC committed a grave abuse of discretion in rendering its decision contrary to the evidence on record. HELD: The conclusion of the public respondent NLRC on appeal that private respondent was not afforded due process before he was dismissed is binding on this Court. Indeed, it is well taken and supported by the records. However, it cannot justify a ruling that private respondent should be reinstated with back wages as the public respondent NLRC so decreed. Although belatedly, private respondent was afforded due process before the labor arbiter wherein the just cause of his dismissal had been established. With such finding, it would be arbitrary and unfair to order his reinstatement with back wages. The Court holds that the policy of ordering the reinstatement to the service of an employee without loss of seniority and the payment of his wages during the period of his separation until his actual reinstatement but not exceeding 3 years without qualification or deduction, when it appears he was not afforded 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.
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Indeed, it will demoralize the rank and file if the undeserving, if not undesirable, remains in the service. Thus in the present case, where the private respondent, who appears to be of violent temper, caused trouble during office hours and even defied his superiors as they tried to pacify him, should not be rewarded with re-employment and back wages. It may encourage him to do even worse and will render a mockery of the rules of discipline that employees are required to observe. Under the circumstances the dismissal of the private respondent for just cause should be maintained. He has no right to return to his former employer. However, the petitioner must nevertheless be held to account for failure to extend to private respondent his right to an investigation before causing his dismissal. The rule is explicit as above discussed. The dismissal of an employee must be for just or authorized cause and after due process. Petitioner committed an infraction of the second requirement. Thus, it must be imposed a sanction for its failure to give a formal notice and conduct an investigation as required by law before dismissing petitioner from employment. The questioned decision of the public respondent NLRC for the reinstatement with back wages of private respondent is REVERSED AND SET ASIDE, and the decision of the labor arbiter dated dismissing the complaint is revived and affirmed, but with the modification that petitioner is ordered to indemnify private respondent in the amount of P1,000.00. The restraining order issued by this Court is hereby made permanent and the bond posted by petitioner is cancelled.
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SERRANO VS NLRC FACTS: Petitioner was hired by private respondent Isetann Department Store as a security checker to apprehend shoplifters and prevent pilferage of merchandise. Initially hired on contractual basis, petitioner eventually became a regular employee on 1985. In 1988, he became head of the Security Checkers Section of private respondent. Sometime in 1991, as a cost-cutting measure, private respondent decided to phase out its entire security section and engage the services of an independent security agency. The loss of his employment prompted petitioner to file a complaint for illegal dismissal, illegal layoff, unfair labor practice, underpayment of wages, and nonpayment of salary and overtime pay. The Labor Arbiter rendered a decision finding petitioner to have been illegally dismissed. He ruled that private respondent failed to establish that it had retrenched its security section to prevent or minimize losses to its business; that private respondent failed to accord due process to petitioner; that private respondent failed to use reasonable standards in selecting employees whose employment would be terminated; that private respondent had not shown that petitioner and other employees in the security section were so inefficient so as to justify their replacement by a security agency, or that "cost-saving devices such as secret video cameras and secret code tags on the merchandise" could not have been employed; instead, the day after petitioner’s dismissal, private respondent employed a safety and security supervisor with duties and functions similar to those of petitioner. Private respondent appealed to the NLRC which, in its resolution reversed the decision of the Labor Arbiter and ordered petitioner to be given separation pay equivalent to one month pay for every year of service, unpaid salary, and proportionate 13th month pay. Petitioner filed a motion for reconsideration, but his motion was denied Hence this petition.
ISSUE/S: Whether or not the petitioner is laid off for a cause HELD: 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
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undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to at least one (1) month pay or at least ½ month pay for every year of service, whichever is higher. A fraction of at least 6 months shall be considered as one (1) whole year.
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. Such an assertion is not a sufficient basis for concluding that the termination of petitioner’s employment was not a bona fide decision of management to obtain reasonable return from its investment, which is a right guaranteed to employers under the Constitution. The law also provides that to terminate the employment of an employee for any of the authorized causes the employer must serve "a written notice on the workers and the Department of Labor and Employment at least 1 month before the intended date thereof." In the case at bar, petitioner was given a notice of termination on the same day, his services were terminated. He was thus denied his right to be given written notice before the termination of his employment, and the question is the appropriate sanction for the violation of petitioner’s right. The rule reversed a long standing policy theretofore followed that even though the dismissal is based on a just cause or the termination of employment is for an authorized cause, the dismissal or termination is illegal if effected without notice to the employee. The court doesn’t agree that disregard of this requirement by an employer renders the dismissal or termination of employment null and void. Such a stance is actually a reversion to the discredited pre-Wenphil rule of ordering an employee to be reinstated and paid backwages when it is shown that he has not been given notice and hearing although his dismissal or layoff is later found to be for a just or authorized cause. Such rule was abandoned in Wenphil because it is really unjust to require an employer to keep in his service one who is guilty, The Wenphil Doctrine Re-examined. The termination of his employment should not be considered void but he should simply be paid separation pay as provided in Art. 283 in addition to backwages. In cases of dismissal under Art. 282, the purpose for the requirement of notice and hearing is not to comply with Due Process Clause of the Constitution. The time for notice and hearing is at the trial stage. Then that is the time we speak of notice and hearing as the essence of procedural due process. Thus, compliance by the employer with the notice requirement before he dismisses an employee does not foreclose the right of the latter to question the legality of his dismissal. If an employee is laid off for any of the causes in Arts. 283-284, i.e., installation of a labor-saving device, but the employer did not give him and the DOLE a 30-day written notice of termination in advance, then the termination of his employment should be considered ineffectual and he should be paid backwages. The consequence of the failure either of the employer or the employee to live up to this precept is to make him liable in damages, not to render his act (dismissal or resignation, as the case may be) void. The measure of damages is the amount of wages the employee should have received were it not for the termination of his employment without prior notice. If warranted, nominal and moral damages may also be awarded.
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Given the nature of the violation, therefore, the appropriate sanction for the failure to give notice is the payment of backwages for the period when the employee is considered not to have been effectively dismissed or his employment terminated. The resolution of the National Labor Relations Commission is MODIFIED by ordering private respondent Isetann Department Store, Inc. to pay petitioner separation pay equivalent to 1 month pay for every year of service, his unpaid salary, and his proportionate 13th month pay and, in addition, full backwages from the time his employment was terminated on October 11, 1991 up to the time the decision herein becomes final. For this purpose, this case is REMANDED to the Labor Arbiter for computation of the separation pay, backwages, and other monetary awards to petitioner.
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AGABON VS. NLRC FACTS: Virgilio and Jenny Agabon worked for respondent Riviera Home Improvements, Inc. as gypsum and cornice installers from January 1992 until Feb 1999. Their employment was terminated when they were dismissed for allegedly abandoning their work. Petitioners Agabon then filed a case of illegal dismissal. The Labor Arbiter ruled in favor of the spouses and ordered Riviera to pay them their money claims. The NLRC reversed the Labor Arbiter’s decision, finding that the Agabons were indeed guilty of abandonment. The CA modified the Labor Arbiter by ruling that there was abandonment but ordering Riviera to pay the Agabons’ money claims. The arguments of both parties are as follows: o The Agabons claim, among others that Riviera violated the requirements of notice and hearing when the latter did not send written letters of termination to their addresses. o Riviera admitted to not sending the Agabons letters of termination to their last known addresses because the same would be futile, as the Agabons do not reside there anymore. o However, it also claims that the Agabons abandoned their work. o More than once, they subcontracted installation works for other companies. o They already were warned of termination if the same act was repeated, still, they disregarded the warning. ISSUE/S: Whether or not the Agabons were illegally dismissed Whether Riviera violated the requirements of notice and hearing Whether or not the violation of the procedural requirements of notice and hearing for termination of employees is a violation of the Constitutional due process
HELD: I o o o
No. There was just cause for their dismissal, i.e., abandonment. Art. 282 specifies the grounds for just dismissal Here, the Agabons were frequently absent from work for having performed installation work for another company, despite prior warning given by Riviera. This clearly establishes an intention to sever the employer-employee relationship between them, and which constitutes abandonment.
II o
o
Yes. While the employer has the right to expect good performance,diligence, good conduct and loyalty from its employees, it also has theduty to provide just compensation to his employees and to observe the procedural requirements of notice and hearing in the termination of his employees. A written notice to the employee specifying the grounds for termination and giving the employee reasonable opportunity to be heard
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o o o o o
A hearing where the employee is given the opportunity torespond to the charges against him and present evidence or rebutthe evidence presented against him. A written notice of termination indicating that grounds have beenestablished to justify his termination upon due consideration of all circumstances. In this case, Riviera failed to notify the Agabons of their termination to their last known addresses. Hence, they violated the procedural requirement laid down by the law in the termination of employees
III o
o
o
o o
o o
o
o o o
No. Constitutional due process is that provided under the Constitution, which involves the protection of the individual against governmental oppression and the assurance of his rights In civil, criminal andadministrative proceedings; statutory due process is that found in the Labor Code and its Implementing Rules and protects the individual from being unjustly terminated without just or authorized cause after notice and hearing. The two are similar in that they both have two aspects: Substantive due process and procedural due process. However, they differ in that under the Labor Code, the first one refers to the valid and authorized causes of employment termination, while the second one refers to the manner of dismissal. A denial of statutory due process is not the same as a denial of Constitutional due process for reasons enunciated in Serrano v. NLRC. The dismissal is valid, but Riviera should pay nominal damages to the Agabons in vindication of the latter for violating their right to notice and hearing. The penalty is in the nature of a penalty or indemnification, the amount dependent on the facts of each case, including the nature of gravity of offense of the employer In this case, the Serrano doctrine was re-examined. In the Serrano case, the dismissal was upheld, but it was held to be ineffectual. Hence, Serrano was still entitled to the payment of his backwages from the time of dismissal until the promulgation of the court of the existence of an authorized cause. Further, he was entitled to his separation pay as mandated under Art. 283. The ruling is unfair to employers and has the danger of thefollowing consequences: The encouragement of filing frivolous suits even by notoriousemployees who were justly dismissed but were deprived of statutory due process; they are rewarded by invoking due process It would create absurd situations where there is just or authorized cause but a procedural infirmity invalidates the termination, ie an employee who became a criminal and threatened his co-workers’ lives, who fled and could not be found It could discourage investments that would generate employment in the economy The payment of backwages is unjustified as only illegaltermination gives the employee the right to be paid full backwages. When the dismissal is valid or upheld, the employee has no right tobackwages
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JAKA VS. NLRC FACTS: Respondents Darwin Pacot, Robert Parohinog, David Bisnar, Marlon Domingo, Rhoel Lescano and Jonathan Cagabcab were earlier hired by petitioner JAKA Foods Processing Corporation until the latter terminated their employment because the corporation was “in dire financial straits”. It is not disputed, however, that the termination was effected without JAKA complying with the requirement under Article 283 of the Labor Code regarding the service of a written notice upon the employees and the Department of Labor and Employment at least 1 month before the intended date of termination. In time, respondents separately filed with the regional Arbitration Branch of the NLRC complaints for illegal dismissal, underpayment of wages and nonpayment of service incentive leave and 13th month pay against JAKA and its HRD Manager, Rosana Castelo. After due proceedings, the Labor Arbiter rendered a decision declaring the termination illegal and ordering JAKA and its HRD Manager to reinstate respondents with full backwages, and separation pay if reinstatement is not possible. Therefrom, JAKA went on appeal to the NLRC, which, in a decision affirmed in toto that of the Labor Arbiter. JAKA filed a motion for reconsideration. Acting thereon, the NLRC came out with another decision this time modifying its earlier decision it REVERSED and SET ASIDE and another one entered ordering respondent JAKA Foods Processing Corporation to pay petitioners separation pay equivalent to one (1) month salary, the proportionate 13th month pay and, in addition, full backwages from the time their employment was terminated on August 29, 1997 up to the time the Decision herein becomes final.
ISSUE/S:
Whether or not the court of appeals correctly awarded full back wages and awarded separation pays to the respondents.
HELD:
The very recent case of Agabon vs. NLRC, the court had the opportunity to resolve a similar question. Therein, it was found that the employees committed a grave offense, i.e., abandonment, which is a form of a neglect of duty which, in turn, is one of the just causes enumerated under Article 282 of the Labor Code. In said case, the validity of the dismissal despite non-compliance with the notice requirement of the Labor Code was upheld. The clear-cut distinction between a dismissal for just cause under Article 282 and a dismissal for authorized cause under Article 283 is further reinforced by the fact that in the first, payment of separation pay, as a rule, is not required, while in the second, the law requires payment of separation pay. For these reasons, there ought to be a difference in treatment when the ground for dismissal is one of the just causes under Article 282, and when based on one of the authorized causes under Article 283.
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On another breath, a dismissal for an authorized cause under Article 283 does not necessarily imply delinquency or culpability on the part of the employee. Instead, the dismissal process is initiated by the employer’s exercise of his management prerogative, i.e. when the employer opts to install labor saving devices, when he decides to cease business operations or when, as in this case, he undertakes to implement a retrenchment program. It is, therefore, established that there was ground for respondents’ dismissal, i.e., retrenchment, which is one of the authorized causes enumerated under Article 283 of the Labor Code. Likewise, it is established that JAKA failed to comply with the notice requirement under the same Article. Considering the factual circumstances in the instant case and the above ratiocination, it was therefore, deem it proper to fix the indemnity at P50,000.00. The Court of Appeals to have been in error when it ordered JAKA to pay respondents separation pay equivalent to 1-month salary for every year of service. The rule, therefore, is that in all cases of business closure or cessation of operation or undertaking of the employer, the affected employee is entitled to separation pay. This is consistent with the state policy of treating labor as a primary social economic force, affording full protection to its rights as well as its welfare. The exception is when the closure of business or cessation of operations is due to serious business losses or financial reverses; duly proved, in which case, the right of affected employees to separation pay is lost for obvious reasons. Resolution of the Court of Appeals are hereby SET ASIDE and a new one entered upholding the legality of the dismissal but ordering petitioner to pay each of the respondents the amount of P50,000.00, representing nominal damages for non-compliance with statutory due process.
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Comparison of Dismiss ‘Now, Pay Later’ Doctrines Doctrines
Distinction
Wenphil Doctrine
When the services of the employee was terminated due to a just or authorized cause but failed to give a formal notice and conduct an investigation as required by law before dismissing from employment, employee’s right to due process has been violated, the dismissal is legal but the employee is entitled to damages by way of indemnification for the violation of the right.
Serrano Doctrine
This doctrine abandoned the WENPHIL DOCTRINE and ruled that if the employee is dismissed under just or authorized cause 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 violated the employee’s right to due process, his dismissal becomes ineffectual. Therefore, the employee is entitled to backwages from the time he was dismissed until the determination of the justness of the cause of the dismissal.
Abandoned the Serrano doctrine and REINSTATED THE WENPHIL DOCTRINE. The dismissal is valid, but employer should pay nominal damages to the Agabons in vindication of the latter for violating their right to notice and hearing. The penalty is in the nature of a penalty or indemnification, the amount dependent on the facts of each case, including the nature of gravity of offense of the employer.
Agabon Doctrine
The payment of backwages is unjustified as only illegal termination gives the employee the right to be paid full backwages.
Jaka Doctrine
This doctrine the dismissal under Art 282 and 283 was distinguished; a dismissal for an authorized cause under Article 283 does not necessarily imply delinquency or culpability on the part of the employee. Instead, the dismissal process is initiated by the employer’s exercise of his management prerogative. The rule, business closure or cessation of operation or undertaking of the employer, the affected employee is entitled to separation pay. This is consistent with the state policy of treating labor as a primary social economic force, affording full protection to its rights as well as its welfare. The exception is when the closure of business or cessation of operations is due to serious business losses or financial reverses; duly proved, in which case, the right of affected employees to separation pay is lost for obvious reasons.
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