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NLRC Commissioner Jovito C. Cagaanan2 Labor law practitioners and labor relation experts have, time and again, raised in several fora, the unfairness of declaring illegal or ineffectual dismissal made for just or authorized causes for failing to comply with the requirements on statutory DUE PROCESS. They asseverate that declaring such dismissals either as illegal or ineffectual would have far-reaching consequences. For one, it discourages investors, whether domestic or foreign, from pouring in investments that can generate employment in the local economy. For another, it can create absurd situations where there is a just or authorized cause warranting dismissal of an employee but simply because there happens to be a procedural infirmity involved in the dismissal of the employee, its lack of compliance invalidates the termination. They say that invalidating the dismissal would not serve public interest. It may even encourage frivolous suits where even the most notorious violators of company rules are being rewarded, by invoking Due Process. The legal basis for lawful termination of one’s employment is found in the Philippine Constitution and the Labor Code. A person’s employment constitutes “property” within the context of the Constitutional protection that “no person shall be deprived of life, liberty or PROPERTY without Due Process of Law.” (CALLANTA VS. CARNATION PHIL., INC. 145 SCRA 286 (1986). And the burden to prove there exists a valid ground for termination of employment rests with the employer (AGOY VS. NLRC, 252 SCRA 588, January 30, 1996). The failure to discharge such burden substantially means the dismissal was illegal. For another, Section 3, Article XIII of the 1987 Philippine Constitution assures the right of workers to security of tenure. And still, we have Article 279 of the Labor Code and applicable jurisprudence which prohibit dismissal of employees except for just or authorized cause, and after due process. Two requisites must concur to constitute a valid dismissal for just cause, namely: 1) must be for any of the just causes under Article 282
EDITOR’S NOTE: This is an article shared by Labor Arbiter Dan C. Santos in one of his lectures in Labor Law and Social Legislation. 2 Commissioner, Fifth Division, National Labor Relations Commission; Bachelor of Arts in English- Liceo de Cagayan University; Bachelor of Laws (cum laude) Silliman University; Professorial lecturer on Labor Standards, Labor Relations and Labor Law Review Xavier University and Liceo de Cagayan University Colleges of Law; 2003 Outstanding Silliman University Law Alumnus Awardee
informing the employee of his dismissal. NLRC. sanction must be imposed on the erring employer in the form of an award of INDEMNITY to the employee. The High Court concluded that reinstating the employee and awarding him with backwages may just encourage the employee to do even worse. on February 8. To comply with the due process requirement. BONIFACIO LAW JOURNAL | From Wenphil to Serrano. the rule followed then was that a dismissal or termination is ILLEGAL if the employee was not given any notice to comply with the statutory due process. Prior to 1989. consistent with the requirement of the Labor Code and jurisprudence forming part of the law of the land that the dismissal of an employee must be for just or authorized cause. No. is not entitled to reinstatement and to backwages because the presence of just or authorized cause. G. where the statutory due process requirements have not been observed. renders the dismissal as VALID. to be issued only after the employee has been given reasonable opportunity to answer and to be heard in his defense (PAMPANGA II ELECTIC COOPERATIVE INC. declaring that a dismissed employee. in an en banc ruling. said the Supreme Court. 244 SCRA 668 (1995). In committing an infraction on one’s statutory right to due process. But in Wenphil. VS. the amount of which depends on the facts of each case and the gravity of the omission committed by the employer. However. two written notices must be given to an employee before he may be lawfully dismissed for just cause. although not given any notice and hearing provided just or authorized cause is duly proven. 1989. the employee has no right to return to his former employment. the amount of indemnity imposed upon the erring employer was only the minimum amount of P1. Hence. and 2) the employee must be accorded Due Process – basic of which are the opportunity to be heard and to defend himself (OANIA VS. apprising the employee of the particular acts or omissions for which his dismissal is sought and 2) Second notice.000. then Back to Wenphil 28 . NLRC.R. 170 SCRA 69. in the case of WENPHIL (WENDY PHILIPPINES) CORPORATION VS. as valid ground.of the Labor Code. It must be held to account for its failure to extend to the employee his right to an investigation before effecting his dismissal. 1995) The Supreme Court had been see-sawing in its policy declarations regarding dismissals with just or authorized causes. 107541. and render a mockery of the rules of discipline that all employees are required to observe.00. November 16. and after due process. the Supreme Court promulgated what is now known as the WENPHIL DOCTRINE.NLRC. which is the first notice. the employer shall not go scot-free. namely: 1) The equivalent of a CHARGE. Then.
inclusive of ALLOWANCES. the employer shall NOT terminate the services of an employee EXCEPT for a JUST CAUSE or when AUTHORIZED by this Title. No. the High Court decided to overturn WENPHIL with another en banc ruling in the case of SERRANO VS. NLRC. RIVIERA HOME IMPROVEMENTS.. then Back to Wenphil 29 . 2000 up to November 17. which led the High Court to conclude that the imposition of penalty as sanction for violation of the notice requirement was less than effective as deterrent. thus.” In confronting the practice of employers in dismissing employees now and paying indemnity later. NLRC & ISETANN DEPARTMENT STORE. 2000. the Supreme Court noted that cases involving dismissal without the requisite notice or hearing significantly increased. The doctrine. In abandoning the WENPHIL DOCTRINE. The rule became known as the WENPHIL DOCTRINE or the BELATED DUE PROCESS RULE. In abandoning the Serrano Doctrine. the High court concluded that the ruling in SERRANO failed to consider the full meaning of Article 279 of the Labor Code which states: “Art. G.Thus. but the employer is penalized to pay an indemnity to the employee for the violation of his right. 279 Security of Tenure – In cases of regular employment. No. was NOT a denial of due process as would nullify the termination. 117040. became known as the SERRANO-ISETANN DOCTRINE which had been observed from January 27. 2004. the High Court declared that the violation by the employer of the due process notice requirement in termination cases. INC. 2004 when the Supreme Court again jettisoned the Serrano doctrine with another en banc ruling in the case of JENNY AGABON ET AL VS. the dismissal is sustained as VALID.R. anchored on just or authorized causes. 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. promulgated November 17. promulgated January 27. 323 SCRA 445.R. the rule that evolved under WENPHIL was that where the employer had a valid reason to dismiss an employee (for just or authorized cause) but the employer failed to follow the requirements of statutory due process. Monitoring developments under the WENPHIL DOCTRINE over the years. G. and to his OTHER BENEFITS or their monetary equivalent computed from the BONIFACIO LAW JOURNAL | From Wenphil to Serrano. The dismissal is only deemed INEFFECTUAL warranting the payment to the employee of full backwages from the time of his dismissal up to finality of the decision because it is only then that the dismissal for just or authorized cause becomes judicially declared. It even observed that employers got rid of undesirable employees by resorting to the practice of “dismiss now and pay later. 158693.
holding that the dismissal was for just or authorized cause. The dismissal is sustained as VALID but the employer has to indemnify the employee for the violation of his statutory right. The new rule under the AGABON RULING is virtually reverting back to WENPHIL. INC. hence. the Supreme Court declared that it simply means the termination is ILLEGAL only if it is NOT for any of the JUST or AUTHORIZED causes provided by law. Invalidating the dismissal would not serve public interest. the need to weigh and balance the rights and the welfare of both employees and employers. the Supreme Court laid down the rule that in cases involving dismissals for just or authorized cause BUT WITHOUT OBSERVANCE OF THE STATUTORY DUE PROCESS REQUIREMENTS or the requirements set forth by law. the Supreme Court declared that the two need each other to foster productivity and economic growth. being interdependent and indispensable partners in nation-building. Labor and management. payment of backwages. then Back to Wenphil 30 .time his compensation was withheld from him up to the time of his actual reinstatement. Accordingly. under the AGABON ruling. Under the Agabon BONIFACIO LAW JOURNAL | From Wenphil to Serrano. GEOTHERMAL. 236 SCRA 371). the better rule is to abandon the SERRANO DOCTRINE and to follow and revert back to WENPHIL.” Clarifying and interpreting Article 279 of the Labor Code. but that sanction has to be imposed on the erring employer in the form of INDEMNITY to be paid to the employee which must this time be made STIFFER than those imposed in WENPHIL inorder to achieve FAIR RESULTS by dispensing justice not just to the employees but to the employers as well. hence considered VALID. the lack of observance of the statutory due process would not nullify the dismissal nor render it ineffectual. NLRC. Thus. still the scales of justice must be balanced to equally protect the rights of the employers (See PHIL. which states that where the dismissal is for just or authorized cause. To borrow the words of Justice Isagani Cruz. VS. allowances and other benefits to a dismissed employee including reinstatement is justified only if the employee was UNJUSTLY (ILLEGALLY) DISMISSED. And the employee who is clearly found guilty of conduct violative of Article 282 of the Labor Code on just cause should not be protected by the Social Justice Clause of the Constitution for the simple reason that Social Justice should be used only to correct an INJUSTICE. the Supreme Court tried to meet the “need to apply a balanced approach to labormanagement relation and dispense justice with an even hand in every case.” For while labor laws are to be liberally construed in favor of the workers.
The amount of indemnity in that case was 50.R. If the dismissal is based on a just cause under Article 282 but the employer failed to comply with the notice requirement. No.R.3 EDITOR’S NOTE: In Agabon vs. However. If the dismissal is based on an authorized cause under Article 283 but the employer failed to comply with the notice requirement. when the dismissal is for just or authorized cause but due process was not observed. the Supreme Court fixed the amount of indemnity at P30. the amount of damages was fixed by the Supreme Court at 30. 3 BONIFACIO LAW JOURNAL | From Wenphil to Serrano. then Back to Wenphil 31 .000 pesos. the dismissal should be upheld. November 17. In that case.000 pesos. the sanction to be imposed should be stiffer because the dismissal process was initiated by the employer’s exercise of his management prerogative. The ruling in Agabon has however been modified by JAKA Food Processing v. the sanction to be imposed upon him should be tempered because the dismissal process was in effect initiated by an act imputable to the employee. 2004. March 28. G. NLRC. 158693.ruling. 2005. Pacot . the employer should be held liable for non-compliance with the procedural requirements of due process.000 but clarified that the amount of indemnity should take into special consideration the gravity of the due process violation of the employer and the facts obtaining in each case. G. 151378. No.