REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. JENNIFER B. CAGANDAHAN, RESPONDENT. [G.R. No. 166676, September 12, 2008] QUISUMBING, J.

: FACTS: JC filed a Petition for Correction of Entries in Birth Certificate before the RTC, alleging that she was born on January 13, 1981 and was registered as a female in the Certificate of Live Birth but while growing up, she developed secondary male characteristics and was diagnosed to have Congenital Adrenal Hyperplasia (CAH) which is a condition where persons thus afflicted possess both male and female characteristics. She further alleged that she was diagnosed to have clitoral hyperthropy in her early years and at age six, underwent an ultrasound where it was discovered that she has small ovaries. At age thirteen, tests revealed that her ovarian structures had minimized, she has stopped growing and she has no breast or menstrual development. She then alleged that for all interests and appearances as well as in mind and emotion, she has become a male person. Thus, she prayed that her birth certificate be corrected such that her gender be changed from female to male and her first name be changed from Jennifer to Jeff. The testimony of Dr. Michael Sionzon of the Department of Psychiatry, University of the Philippines-Philippine General Hospital. Dr. Sionzon issued a medical certificate stating that respondent's condition is known as CAH. He explained that genetically respondent is female but because her body secretes male hormones, her female organs did not develop normally and she has two sex organs - female and male. He testified that this condition is very rare, that respondent's uterus is not fully developed because of lack of female hormones, and that she has no monthly period. He further testified that respondent's condition is permanent and recommended the change of gender because respondent has made up her mind, adjusted to her chosen role as male, and the gender change would be advantageous to her. TC granted the change of her name from Jennifer to Jeff and her gender from female to male. OSG contended that the petition was fatally defective for non-inclusion of the local civil registrar as indispensable party and for non compliance of the Rules of Court and that it failed to state that respondent is a bona fide resident of the province where the petition was filed for at least three (3) years prior to the date of such filing as mandated under Section 2(b), Rule 103 of the Rules of Court. OSG argues that Rule 108 does not allow change of sex or gender in the birth certificate and respondent's claimed medical condition known as CAH does not make her a male. ISSUE: Whether the trial court erred in ordering the correction of entries in the birth certificate of respondent to change her sex or gender, from female to male, on the ground of her medical condition known as CAH, and her name from "Jennifer" to "Jeff," under Rules 103 and 108 of the Rules of Court. RULING: NO; The determination of a person's sex appearing in his birth certificate is a legal issue and the court must look to the statutes. In this connection, Article 412 of the Civil Code provides that no entry in a civil register shall be changed or corrected without a judicial order. This provision was amended by Republic Act No. 9048 in so far as clerical or typographical errors are involved. The correction or change of such matters can now be made through administrative proceedings and without the need for a judicial order. In effect, Rep. Act No. 9048 removed from the ambit of Rule 108 of the Rules of Court the correction of such errors. Rule 108 now applies only to substantial changes and corrections in entries in the civil register. Under Rep. Act No. 9048, a correction in the civil registry involving the change of sex is not a mere clerical or typographical error. It is a substantial change for which the applicable procedure is Rule 108 of the Rules of Court. The entries envisaged in Article 412 of the Civil Code and correctable under Rule 108 of the Rules of Court are those provided in Articles 407 and 408 of the Civil Code which are “Acts, events and judicial decrees concerning the civil status of persons shall be recorded in the civil register” and those that shall be entered in the civil register: such as (1) Births; (2) marriages; (3) deaths; (4) legal separations; (5) annulments of marriage; (6) judgments declaring marriages void from the beginning; (7) legitimations; (8) adoptions; (9) acknowledgments of natural children; (10) naturalization; (11) loss, or (12) recovery of citizenship; (13) civil interdiction; (14) judicial determination of filiation; (15) voluntary emancipation of a minor; and (16) changes of name. Respondent undisputedly has CAH. This condition causes the early or "inappropriate" appearance of male characteristics. A person, like respondent, with this condition produces too much androgen, a male

and/or secondary sex characteristics are determined to be neither exclusively male nor female. He chose not to do so. this Court has held that a change of name is not a matter of right but of judicial discretion. which are quoted below: Section 2. but were absorbed employees. Such a change will conform with the change of the entry in his birth certificate from female to male. FEBTC employees. Respondent here has simply let nature take its course and has not taken unnatural steps to arrest or interfere with what he was born with. the president of the Union requested BPI to implement the Union Shop Clause of the CBA and to terminate their employment pursuant thereto.New employees falling within the bargaining unit as defined in Article I of this Agreement. But if based on medical testimony and scientific development showing the respondent to be other than female. PR is the exclusive bargaining agent of BPI's rank and file employees in Davao City. then a change in the subject's birth certificate entry is in order. Intersexuality "is the state of a living thing of a gonochoristic species whose sex chromosomes. 164301 August 10. BPI EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK (PR) G. BPI vs. Respondent could have undergone treatment and taken steps. To him belongs the human right to the pursuit of happiness and of health and in the absence of evidence to show that classifying respondent as a male will harm other members of society who are equally entitled to protection under the law. 2010 LEONARDO-DE CASTRO.: FACTS: BSP and SEC approved the Articles of Merger between BPI and Far East Bank and Trust Company (FEBTC). with their status and tenure recognized and salaries and benefits maintained. then there is no basis for a change in the birth certificate entry for gender. to be exercised in the light of the reasons adduced and the consequences that will follow. however.Pursuant to the Article and Plan of Merger. The Voluntary Arbitrator concluded that the former FEBTC employees could not be compelled to join the Union. J. When these former FEBTC employees refused to attend the hearing. as well as those who retracted their membership. the Court affirms as valid and justified the respondent's position and his personal judgment of being a male. as it was their constitutional right to join or not to join any organization. PR invited said FEBTC employees to a meeting regarding the Union Shop Clause (Article II. The voluntary arbitrator later ruled in favor of BPI’s interpretation that the former FEBTC employees were not covered by the Union Security Clause of the CBA since they are not new employees who were hired and subsequently regularized. the issue remained unresolved. . The parties both advert to certain provisions of the existing CBA. And accordingly. if JC would be determined as female. to force his body into the categorical mold of a female but he did not. including those in its different branches across the country. who may hereafter be regularly employed by the Bank shall.R. genitalia. PR sent notices to the former FEBTC employees who refused to join. Prior to the effectivity of the merger. and called them to a hearing regarding the matter. Later. Union Shop . An organism with intersex may have biological characteristics of both male and female sexes. The trial court's grant of respondent's change of name from Jennifer to Jeff implies a change of a feminine name to a masculine name. The former FEBTC rank-and-file employees in Davao City did not belong to any labor union at the time of the merger." In the instant case. After the meeting called by the Union. CAH is one of many conditions that involve intersex anatomy. It is understood that membership in good standing in the Union is a condition of their continued employment with the Bank. join the Union as a condition of their continued employment. while others refused. he has already ordered his life to that of a male. Considering the consequence that respondent's change of name merely recognizes his preferred gender. Section 2) of the existing CBA between BPI and PR. No. all the assets and liabilities of FEBTC were transferred to and absorbed by BPI as the surviving corporation. like taking lifelong medication. Respondent is the one who has to live with his intersex anatomy. we find merit in respondent's change of name. some of those who initially joined retracted their membership. When brought to the Grievance Committee. within thirty (30) days after they become regular employees. were hired by BPI as its own employees.hormone. As for respondent's change of name under Rule 103. some of the former FEBTC employees joined the Union. Nature has instead taken its due course in respondent's development to reveal more fully his male characteristics.

In the case at bar. better situation than the existing BPI employees. remain as members in good standing of the union otherwise. the Court held that. employees already in the service and already members of a union other than the majority at the time the union shop agreement took effect . under law and jurisprudence. Inc. As such. confidential employees who are excluded from the rank and file bargaining unit. the Court held that a valid form of union security. the absorbed employees' length of service from its former employer is tacked with their employment with BPI. The similarities lies on the following. . and employees excluded from the union shop by express terms of the agreement. A closed-shop agreement is an agreement whereby an employer binds himself to hire only members of the contracting union who must continue to remain members in good standing to keep their jobs. it wields group solidarity. the "absorbed" employees shall enjoy the "fruits of labor" of the petitioner-union and its members for nothing in exchange. the following kinds of employees are exempted from its coverage. The existing BPI employees by virtue of the "union-shop" clause are required to pay the monthly union dues. Liberty Flour Mills. To this end. and such a provision in a collective bargaining agreement is not a restriction of the right of freedom of association guaranteed by the Constitution.To rule otherwise would definitely result to a very awkward and unfair situation wherein the "absorbed" employees shall be in a different if not." IT ADDS MEMBERSHIP AND COMPULSORY DUES. employees who at the time the union shop agreement takes effect are bona fide members of a religious organization which prohibits its members from joining labor unions on religious grounds. In the case of Manila Mandarin Employees Union vs. (d) new company policy to follow. Certainly. The Court is persuaded that the similarities of "new" and "absorbed" employees far outweighs thedistinction between them. this would disturb industrial peace in the company which is the paramount reason for the existence of the CBA and the union. This condition is a valid restriction of the freedom or right not to join any labor organization because it is in favor of unionism. namely. On the other hand." ISSUE: May a corporation invoke its merger with another corporation as a valid ground to exempt its "absorbed employees" from the coverage of a union shop clause contained in its existing Collective Bargaining Agreement (CBA) with its own certified labor union? RULING: Section 2. The distinction ends there. collective bargaining and negotiations and peaceful concerted actions including the right to strike in accordance with law. they shall be terminated from the company. the situation of the former FEBTC employees in this case clearly does not fall within the first three exceptions to the application of the Union Shop Clause discussed earlier. By holding out to loyal members a promise of employment in the closed-shop.This Court agrees with the voluntary arbitrator that the ABSORBED employees are distinct and different from NEW employees BUT only in so far as their employment service is concerned. the absorbed employees service is continuous and there is no gap in their service record. It is the policy of the State to promote unionism to enable the workers to negotiate with management on the same level and with more persuasiveness than if they were to individually and independently bargain for the improvement of their respective conditions. It is "THE MOST PRIZED ACHIEVEMENT OF UNIONISM. to wit: (a) they have a new employer. However. NLRC. In the case of Liberty Flour Mills Employees v. Indeed. The sole category therefore in which petitioner may prove its claim is the fourth recognized exception or whether the former FEBTC employees are excluded by the express terms of the existing CBA between petitioner and respondent." There is no question that these purposes could be thwarted if every worker were to choose to go his own separate way instead of joining his co-employees in planning collective action and presenting a united front when they sit down to bargain with their employers. (c) new terms of employment and. and other union-related obligations. Otherwise stated. the Constitution guarantees to them the rights "to self-organization. There is nothing in the said provision which requires that a "new" regular employee first undergo a temporary or probationary status before being deemed as such under the union shop clause of the CBA. No allegation or evidence of religious exemption or prior membership in another union or engagement as a confidential employee was presented by both parties. Article II of the CBA is silent as to how one becomes a "regular employee" of the BPI for the first time. All employees in the bargaining unit covered by a Union Shop Clause in their CBA with management are subject to its terms. (b) new working conditions. they should be considered as "new" employees for purposes of applying the provisions of the CBA regarding the "union-shop" clause.

and to their certified collective bargaining agent or labor union. we are not convinced that in the absence of a stipulation in the merger plan the surviving corporation was compelled. For the employee to be "absorbed" by BPI. then due to BPI's blanket . In legal parlance. employment contracts are automatically transferable from one entity to another in the same manner that a contract pertaining to purely proprietary rights . Likewise. human beings are never embraced in the term "assets and liabilities. It is because of this human element in employment contracts and the personal. this Court believes that it is contrary to public policy to declare the former FEBTC employees as forming part of the assets or liabilities of FEBTC that were transferred and absorbed by BPI in the Articles of Merger. should be deemed to refer only to property rights and obligations of FEBTC and do not include the employment contracts of its personnel.is perfectly and automatically transferable to the surviving corporation. It is reasonable to assume that BPI would have different rules and regulations and company practices than FEBTC and it is incumbent upon the former FEBTC employees to obey these new rules and adapt to their new environment. it is duty-bound to absorb the dissolved corporation's employees. BPI was being required to assume all the employment contracts of all existing FEBTC employees with the conformity of the employees Several cases have involved the situation where as a result of mergers. FEBTC employees had the concomitant right to choose not to be absorbed by BPI. from the tenor of local and foreign authorities. in a merger situation. Indeed. consolidations. it bears to emphasize his dissent also recognizes that the employee may choose to end his employment at any time by voluntarily resigning. Certainly. Thus. in voluntary mergers. in this instance. one group of employees. there are presumably changes in his condition of employment even if his previous tenure and salary rate is recognized by BPI. consensual nature thereof that we cannot agree that. even in the absence of a stipulation in the plan of merger. Justice Brion takes the position that because the surviving corporation continues the personality of the dissolved corporation and acquires all the latter's rights and obligations.such as a promissory note or a deed of sale of property . or may be judicially compelled. it requires the employees' implied or express consent. There was no government regulation or law that compelled the merger of the two banks or the absorption of the employees of the dissolved corporation by the surviving corporation. Assets and liabilities. however. Furthermore.Absorbed FEBTC Employees are neither Assets nor Liabilities. absorption of the dissolved corporation's employees or the recognition of the absorbed employees' service with their previous employer may be demanded from the surviving corporation if required by provision of law or contract. It would have been a different matter if there was an express provision in the articles of merger that as a condition for the merger." Moreover. Once an FEBTC employee is absorbed. BPI's absorption of former FEBTC employees was neither by operation of law nor by legal consequence of contract. finds that their jobs have been discontinued except to the extent that they are offered employment at the place or by the employer where the work is to be carried on in the future. Such cases have involved the question whether such transferring employees should be entitled to carry with them their accumulated seniority or whether they are to be compelled to start over at the bottom of the seniority list in the "new" job. The surviving corporation too is duty-bound to protect the rights of its own employees who may be affected by the merger in terms of seniority and other conditions of their employment due to the merger. if BPI as an employer had the right to choose who to retain among FEBTC's employees. to absorb all employees under the same terms and conditions obtaining in the dissolved corporation as the surviving corporation should also take into consideration the state of its business and its obligations to its own employees. Certainly nothing prevented the FEBTC's employees from resigning or retiring and seeking employment elsewhere instead of going along with the proposed absorption. with respect to FEBTC employees that BPI chose to employ and who also chose to be absorbed. It has been recognized in some cases that the accumulated seniority does not survive and cannot be transferred to the "new" job. or shutdowns. who had accumulated seniority at one plant or for one employer. Even assuming we accept Justice Brion's theory that in a merger situation the surviving corporation should be compelled to absorb the dissolved corporation's employees as a legal consequence of the merger and as a social justice consideration. Employment is a personal consensual contract and absorption by BPI of a former FEBTC employee without the consent of the employee is in violation of an individual's freedom to contract.

Petitioner likewise failed to point to any provision in the CBA expressly excluding from the Union Shop Clause new employees who are "absorbed" as regular employees from the beginning of their employment. To reiterate.assumption of liabilities and obligations under the articles of merger. the CBA and the Union Shop Clause therein were already in effect and neither of them had the opportunity to express their preference for unionism or not. The Union Shop Clause in the CBA simply states that "new employees" who during the effectivity of the CBA "may be regularly employed" by the Bank must join the union within thirty (30) days from their regularization. If they are new employees. petitioner's new regular employees (regardless of the manner by which they became employees of BPI) are required to join the Union as a condition of their continued employment. BPI was bound to respect the years of service of these FEBTC employees and to pay the same. This further strengthens the view that BPI and the former FEBTC employees voluntarily contracted with each other for their employment in the surviving corporation. there is no special class of employees called "absorbed employees. The effect or consequence of BPI's so-called "absorption" of former FEBTC employees should be limited to what they actually agreed to. or commensurate salaries and other benefits that these employees previously enjoyed with FEBTC. the purpose of the union shop clause. However. and so neither must we. To our dissenting colleagues. categorical definition of "new employee" in the CBA. The dissenting opinion of Justice Brion dovetails with Justice Carpio's view only in their restrictive interpretation of who are "new employees" under the CBA. for purposes of applying the Union Shop Clause. The Court agrees with the Court of Appeals that there are no substantial differences between a newly hired non-regular employee who was regularized weeks or months after his hiring and a new employee who was absorbed from another bank as a regular employee pursuant to a merger. There is nothing in the said clause that limits its application to only new employees who possess non-regular status. at the start of their employment. there were benefits under the CBA that the former FEBTC employees did not enjoy with their previous employer . the phrase "new employees" (who are covered by the union shop clause) should only include new employees who were hired as probationary during the life of the CBA and were later granted regular status. In other words. However." In order for the Court to apply or not apply the Union Shop Clause. the Court should not uphold an interpretation of the term "new employee" based on the general and extraneous provisions of the Corporation Code on merger that would defeat. we can only classify the former FEBTC employees as either "old" or "new. What is indubitable from the Union Shop Clause is that upon the effectivity of the CBA. in law or even under the express terms of the CBA. recognition of the FEBTC employees' years of service. As BPI employees. meaning probationary status. salary rate and . the Union Shop Clause did not distinguish between new employees who are non-regular at their hiring but who subsequently become regular and new employees who are "absorbed" as regular and permanent from the beginning of their employment. for they are undeniably similarly situated. They propose that the former FEBTC employees who were deemed regular employees from the beginning of their employment with BPI should be treated as a special class of employees and be excluded from the union shop clause. although in a sense BPI is continuing FEBTC's employment of these absorbed employees. the term "new employee" as used in the union shop clause is used broadly without any qualification or distinction. BPI's employment of these absorbed employees was not under exactly the same terms and conditions as stated in the latter's employment contracts with FEBTC. As the Union likewise pointed out in its pleadings. At the time they are being required to join the Union.e. Both employees were hired/employed only after the CBA was signed. the provision of the Article 248(e) of the Labor Code in point mandates that nothing in the said Code or any other law should stop the parties from requiring membership in a recognized collective bargaining agent as a condition of employment. The Union Shop Clause did not so distinguish. They both enjoy benefits that the Union was able to secure for them under the CBA. they will enjoy all these CBA benefits upon their "absorption. rather than fulfill. i. They belong to the same bargaining unit being represented by the Union. Justice Brion himself points out that there is no clear." If they are not "old" employees. they are both already regular rank and file employees of BPI." Thus. they are necessarily "new" employees. When they both entered the employ of BPI. We see no cogent reason why the Union Shop Clause should not be applied equally to these two types of new employees.

1961. being the weaker in economic power and resources than capital. et al. The legal protection granted to such right to refrain from joining is withdrawn by operation of law.. If the Union Shop Clause is valid as to other new regular BPI employees." By virtue. An employer may confer upon a new employee the status of regular employment even at the onset of his engagement. limited. therefore. Court of Industrial Relations. by virtue of which the employer may employ only member of the collective bargaining union. if an employee or laborer is already a member of a labor union different from the union that entered into a collective bargaining agreement with the employer providing for a closed-shop." The rationale for upholding the validity of union shop clauses in a CBA. In People's Industrial and Commercial Employees and Workers Organization v. Inc. this Court has ruled that the individual employee's right not to join a union may be validly restricted by a union security clause in a CBA 49cra1aw and such union security clause is not a violation of the employee's constitutional right to freedom of association. Moreover. vs. deserve protection that is actually substantial and material.53cra1aw we recognized that "[l]abor. if any person. regardless of his religious beliefs. Right of an Employee not to Join a Union is not Absolute and Must Give Way to the Collective Good of All Members of the Bargaining Unit. provides that although it would be an unfair labor practice for an employer "to discriminate in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization" the employer is. 3350. Laws and jurisprudence promote unionism and afford certain protections to the certified bargaining agent in a unionized company because a strong and effective union presumably benefits all employees in the bargaining unit since such a union would be in a better position to demand improved benefits and conditions of work from the employer. This is the rationale behind the State policy to promote unionism . there is no reason why the same clause would be a violation of the "absorbed" employees' freedom of association. No. 28. Thus Section 4 (a) (4) of the Industrial Peace Act. wishes to be employed or to keep his employment. People's Industrial and Commercial Corporation. that the closed-shop proviso of a collective bargaining agreement entered into between an employer and a duly authorized labor union is applicable not only to the employees or laborers that are employed after the collective bargaining agreement had been entered into but also to old employees who are not members of any labor union at the time the said collective bargaining agreement was entered into. There is nothing in the Labor Code and other applicable laws or the CBA provision at issue that requires that a new employee has to be of probationary or non-regular status at the beginning of the employment relationship. said employee or worker cannot be obliged to become a member of that union which had entered into a collective bargaining agreement with the employer as a condition for his continued employment. not precluded "from making an agreement with a labor organization to require as a condition of employment membership therein. however. no law prohibits an employer from voluntarily recognizing the length of service of a new employee with a previous employer in relation to computation of benefits or seniority but it should not unduly be interpreted to exclude them from the coverage of the CBA which is a binding contractual obligation of the employer and employees. before the enactment of Republic Act No. The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace Act is.R. 3350. Time and again. 50cra1aw It is unsurprising that significant provisions on labor protection of the 1987 Constitution are found in Article XIII on Social Justice. the right of said employee not to join the labor union is curtailed and withdrawn.other benefits with their previous employer. of a closed shop agreement. et al. company policies and rules which apply to employees similarly situated.. The effect should not be stretched so far as to exempt former FEBTC employees from the existing CBA terms. G.. Hence. In other words. even if they impinge upon the individual employee's right or freedom of association. he must become a member of the collective bargaining union. The constitutional guarantee given the right to form unions 51cra1aw and the State policy to promote unionism52cra1aw have social justice considerations. before its amendment by Republic Act No. if such labor organization is the representative of the employees. however. Jan. where a labor union and an employer have agreed on a closed shop. is not to protect the union for the union's sake. L-16561. This Court had categorically held in the case of Freeman Shirt Manufacturing Co. and the employees must continue to be members of the union for the duration of the contract in order to keep their jobs.

JENNY M. Their joining the certified union would. since the employees. no longer contested the adverse Court of Appeals' decision. 1999 when they were dismissed for abandonment of work.R. the Court is not unmindful that the former FEBTC employees' refusal to join the union and BPI's refusal to enforce the Union Shop Clause in this instance may have been based on the honest belief that the former FEBTC employees were not covered by said clause. the applicable retirement plan. In sum. RHI. assuming said clause has been carried over in the present CBA and there has been no material change in the situation of the parties. In the interest of fairness. It encourages employee solidarity and affords sufficient protection to the majority status of the union during the life of the CBA which are the precisely the objectives of union security clauses. lead to an inequitable and very volatile labor situation which this Court has consistently ruled against. The NLRC reversed the LA because it found that pets. J. Petitioners assert that they were dismissed because the private respondent refused to give them assignments unless they agreed to work on a “pakyaw” basis when they reported for duty on February 23. and VICENTE ANGELES G. Petitioners also claim that private respondent did not comply with the twin requirements of notice and hearing. or the CBA as the case may be.54cra1aw In the case at bar." A contrary appreciation of the facts of this case would. there is even greater reason for the union to request their dismissal from the employer since the CBA also contained a Maintenance of Membership Clause. This is clearly not the case precisely because BPI expressly recognized under the merger the length of service of the absorbed employees with FEBTC. had abandoned their work and were not entitled to backwages and separation pay. be in the best interests of the former FEBTC employees for it unites their interests with the majority of employees in the bargaining unit. which was elucidated in the above-cited case of Liberty Flour Mills Employees v. such as the Union Shop Clause involved herein. NLRC & RIVIERA HOME IMPROVEMENTS. INC. maintained that . he maintains that one of the dire consequences to the former FEBTC employees who refuse to join the union is the forfeiture of their retirement benefits. in recognition that ultimately the individual employee will be benefited by that policy. Certainly. CA affirmed the ruling of the NLRC. 2004. Nonetheless.declared in the Constitution. It employed Virgilio and Jenny Agabon as gypsum board and cornice installers on January 2. we believe the former FEBTC employees should be given a fresh thirty (30) days from notice of finality of this decision to join the union before the union demands BPI to terminate their employment under the Union Shop Clause. Inc. 1992 until February 23. Also in the dissenting opinion of Justice Carpio. settled jurisprudence has already swung the balance in favor of unionism. there is nothing in the union shop clause that should be read as to curtail an employee's eligibility to apply for retirement if qualified under the law. Liberty Flour Mills. In the hierarchy of constitutional values. 158693. based on their combined length of service with FEBTC and BPI. We are indeed not being called to balance the interests of individual employees as against the State policy of promoting unionism. A final point in relation to procedural due process. who were parties in the court below. They did not agree on this arrangement because it would mean losing benefits as Social Security System (SSS) members. this Court has repeatedly held that the right to abstain from joining a labor organization is subordinate to the policy of encouraging unionism as an instrument of social justice. 1999.: FACTS: RHI is engaged in the business of selling and installing ornamental and construction materials. this Court finds it reasonable and just to conclude that the Union Shop Clause of the CBA covers the former FEBTC employees who were hired/employed by BPI during the effectivity of the CBA in a manner which petitioner describes as "absorption. which supposedly has gathered the support of the majority of workers within the bargaining unit in the appropriate certification proceeding. In the case of former FEBTC employees who initially joined the union but later withdrew their membership. in fact. since the former FEBTC employees are deemed covered by the Union Shop Clause. No. they may still opt to retire if they are qualified under the law. undoubtedly. they are required to join the certified bargaining agent. They filed an illegal dismissal complaint wherein the Labor Arbiter declared their dismissal to be illegal. on the other hand. or the CBA. AGABON and VIRGILIO C. Should some refuse to become members of the union. the existing retirement plan. November 17. AGABON VS. YNARES-SANTIAGO.

is given opportunity to respond to the charge. The record of an employee is a relevant consideration in determining the penalty that should be meted out to him. (c) fraud or willful breach by the employee of the trust reposed in him by his employer or his duly authorized representative. hence. petitioners were frequently absent having subcontracted for an installation work for another company. For termination of employment based on just causes as defined in Article 282 of the Code: (a) A written notice served on the employee specifying the ground or grounds for termination. For a valid finding of abandonment. Petitioners also demanded for an increase in their wage to P280. Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. PR’s manager even talked to petitioner Virgilio Agabon by telephone to tell him about the new assignment at Pacific Plaza Towers involving 40. and (c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstances. On the other hand.00 per day. (b) A hearing or conference during which the employee concerned. the law requires not only the existence of a just and valid cause but also enjoins the employer to give the employee the opportunity to be heard and to defend himself. (b) gross and habitual neglect by the employee of his duties. and (e) other causes analogous to the foregoing. the law also recognizes the right of the employer to expect from its workers not only good performance.000 square meters of cornice installation work. they sent two letters to the last known addresses of the petitioners advising them to report for work. – In all cases of termination of employment. but also good conduct and loyalty. RULING: To dismiss an employee. In January 1996. In fact. However. Subcontracting for another company clearly showed the intention to sever the employer-employee relationship with PR . they did not report for work because they were working for another company. these two factors should be present: (1) the failure to report for work or absence without valid or justifiable reason. petitioners did not report for work because they had subcontracted to perform installation work for another company. the following standards of due process shall be substantially observed: I. Article 282 of the Labor Code enumerates the just causes for termination by the employer: (a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or the latter’s representative in connection with the employee’s work. petitioners stopped reporting for work and filed the illegal dismissal case. The employer may not be compelled to continue to employ such persons whose continuance in the service will patently be inimical to his interests. and (2) a clear intention to sever employer-employee relationship. present his evidence or rebut the evidence presented against him. When this was not granted.petitioners were not dismissed but had abandoned their work. (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. . grounds have been established to justify his termination. It is a form of neglect of duty. The law imposes many obligations on the employer such as providing just compensation to workers. In February 1999. This was not the first time they did this. with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employees has no more intention to work. Petitioners disregarded the warning and exhibited a clear intention to sever their employer-employee relationship. observance of the procedural requirements of notice and hearing in the termination of employment. adequate work and diligence. and giving to said employee reasonable opportunity within which to explain his side. ISSUE: Whether petitioners were illegally dismissed. Private respondent at that time warned petitioners that they would be dismissed if this happened again. a just cause for termination of employment by the employer. Standards of due process: requirements of notice. The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified. with the assistance of counsel if the employee so desires.

however. The rationale for the re-examination of the Wenphil doctrine in Serrano was the significant number of cases involving dismissals without requisite notices. A termination for an authorized cause requires payment of separation pay. reinstatement and full backwages are mandated under Article 279. a notice of the decision to dismiss. (3) the dismissal is without just or authorized cause and there was no due process. the dismissal should be upheld. Article 279 mandates that the employee is entitled to reinstatement without loss of seniority rights and other privileges and full backwages. including reinstatement. Due process is that which comports with the deepest notions of what is fair and right and just. The rule thus evolved: where the employer had a valid reason to dismiss an employee but did not follow the due process requirement. It is a constitutional restraint on the legislative as well as on the executive and judicial powers of the government provided by the Bill of Rights. . it should not invalidate the dismissal. While the procedural infirmity cannot be cured. In the fourth situation. We concluded that the imposition of penalty by way of damages for violation of the notice requirement was not serving as a deterrent. the employer should be held liable for non-compliance with the procedural requirements of due process . We held that the violation by the employer of the notice requirement in termination for just or authorized causes was not a denial of due process that will nullify the termination. and (4) the dismissal is for just or authorized cause but due process was not observed. Hence. (2) the dismissal is without just or authorized cause but due process was observed. Private respondent. In the first situation. or for health reasons under Article 284. In the second and third situations where the dismissals are illegal. this is not a valid excuse because the law mandates the twin notice requirements to the employee’s last known address. However. Unfortunately for the private respondent. From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause under Article 282 of the Labor Code. Procedurally. separation pay may be granted. Payment of backwages and other benefits. and (2) if the dismissal is based on authorized causes under Articles 283 and 284. inclusive of allowances. Serrano was confronting the practice of employers to “dismiss now and pay later” by imposing full backwages. the foregoing notices shall be served on the employee’s last known address. The Due Process Clause in Article III. the dismissal is undoubtedly valid and the employer will not suffer any liability. The dismissal should be upheld because it was established that the petitioners abandoned their jobs to work for another company. in Serrano. the dismissal may be upheld but the employer will be penalized to pay an indemnity to the employee. Thus.In case of termination. However. When the termination of employment is declared illegal. (1) if the dismissal is based on a just cause under Article 282. the employer must give the employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his separation. is justified only if the employee was unjustly dismissed. the rule on the extent of the sanction was changed. This became known as the WENPHIL or BELATED DUE PROCESS RULE. Dismissals based on just causes contemplate acts or omissions attributable to the employee while dismissals based on authorized causes involve grounds under the Labor Code which allow the employer to terminate employees . it should be held liable for non-compliance with the procedural requirements of due process . we now required payment of full backwages from the time of dismissal until the time the Court finds the dismissal was for a just or authorized cause. for an authorized cause under Article 283. and due process was observed. the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment: a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard. and other benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement. This means that the termination is illegal only if it is not for any of the justified or authorized causes provided by law. 2000. did not follow the notice requirements and instead argued that sending notices to the last known addresses would have been useless because they did not reside there anymore. On January 27. Section 1 of the Constitution embodies a system of rights based on moral principles so deeply imbedded in the traditions and feelings of our people as to be deemed fundamental to a civilized society as conceived by our entire history. If reinstatement is no longer possible where the dismissal was unjust. The present case squarely falls under the fourth situation. the dismissal is ineffectual and the employer must pay full backwages from the time of termination until it is judicially declared that the dismissal was for a just or authorized cause.

otherwise known as the Labor Code of the Philippines in Book VI. taking into account the relevant circumstances. the petitioners committed a grave offense. i. 9 and 10. The amount of such damages is addressed to the sound discretion of the court. Constitutional due process protects the individual from the government and assures him of his rights in criminal.. Allegations by PR that it does not operate during holidays and that it allows its employees 10 days leave with pay. as amended.e. . the better rule is to abandon the Serrano doctrine and to follow Wenphil by holding that the dismissal was for just cause but imposing sanctions on the employer. abandonment. if PR indeed paid petitioners’ holiday pay and service incentive leave pay. it failed to discharge the onus probandi thereby making it liable for such claims to the petitioners. civil or administrative proceedings. must be stiffer than that imposed in Wenphil. the manner of dismissal.e. the valid and authorized causes of employment termination under the Labor Code. has two aspects: substantive. while statutory due process found in the Labor Code and Implementing Rules protects employees from being unjustly terminated without just cause after notice and hearing. Therefore statutory due process should be differentiated from failure to comply with constitutional due process. Breaches of these due process requirements violate the Labor Code.[33] It must be stressed that in the present case. By doing so. Consequently.D. if the requirements of due process were complied with. But it did not. except with respect to the 13 th month pay wherein it presented cash vouchers showing payments of the benefit in the years disputed. After carefully analyzing the consequences of the divergent doctrines in the law on employment termination. The employer should not be compelled to continue employing a person who is admittedly guilty of misfeasance or malfeasance and whose continued employment is patently inimical to the employer. as amended by Department Order Nos. Procedural due process requirements for dismissal are found in the Implementing Rules of P. 442.. and procedural. In the case at bar. this Court would be able to achieve a fair result by dispensing justice not just to employees. The violation of the petitioners’ right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages. Certainly. i. like Constitutional due process.. Such sanctions.Due process under the Labor Code. i.e. do not constitute proof of payment. other than being self-serving. an employer should not be compelled to pay employees for work not actually performed and in fact abandoned. Rule I. 2. it could have easily presented documentary proofs of such monetary benefits to disprove the claims of the petitioners. would undoubtedly result in a valid dismissal. which. however. The law protecting the rights of the laborer authorizes neither oppression nor self-destruction of the employer. Sec. we believe that in cases involving dismissals for cause but without observance of the twin requirements of notice and hearing. but to employers as well.

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