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Agabon vs NLRC (2004) G.R.

158693
Facts:
Private respondent Riviera Home Improvements, Inc. is engaged in the business of
selling and installing ornamental and construction materials. It employed petitioners
Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers on January 2,
!!2 until "ebruary 2#, !!! $hen they $ere dismissed for abandonment of $or%.
Petitioners then &led a complaint for illegal dismissal and payment of money claims

and
on 'ecember 2(, !!!, the )abor Arbiter rendered a decision declaring the dismissals
illegal and ordered private respondent to pay the monetary claims.
Iss!: *+, respondent-s dismissal is illegal and if not, entitles them bene&ts.
"!#$: .he dismissal is legal and entitles them of payment of bene&ts.
'ismissals based on /ust causes contemplate acts or omissions attributable to the
employee $hile dismissals based on authori0ed causes involve grounds under the )abor
1ode $hich allo$ the employer to terminate employees. A termination for an authori0ed
cause re2uires payment of separation pay. *hen the termination of employment is
declared illegal, reinstatement and full bac% $ages are mandated under Article 23!. If
reinstatement is no longer possible $here the dismissal $as un/ust, separation pay may
be granted.
Procedurally, 45 if the dismissal is based on a /ust cause under Article 2(2, the
employer must give the employee t$o $ritten notices and a hearing or opportunity to
be heard if re2uested by the employee before terminating the employment6 a notice
specifying the grounds for $hich dismissal is sought a hearing or an opportunity to be
heard and after hearing or opportunity to be heard, a notice of the decision to dismiss7
and 425 if the dismissal is based on authori0ed causes under Articles 2(# and 2(8, the
employer must give the employee and the 'epartment of )abor and 9mployment
$ritten notices #: days prior to the e;ectivity of his separation.
"rom the foregoing rules four possible situations may be derived6 45 the dismissal is for
a /ust cause under Article 2(2 of the )abor 1ode, for an authori0ed cause under Article
2(#, or for health reasons under Article 2(8, and due process $as observed7 425 the
dismissal is $ithout /ust or authori0ed cause but due process $as observed7 4#5 the
dismissal is $ithout /ust or authori0ed cause and there $as no due process7 and 485 the
dismissal is for /ust or authori0ed cause but due process $as not observed.
In the fourth situation, the dismissal should be upheld. *hile the procedural in&rmity
cannot be cured, it should not invalidate the dismissal. Ho$ever, the employer should
be held liable for non<compliance $ith the procedural re2uirements of due process. .he
present case s2uarely falls under the fourth situation. .he dismissal should be upheld
because it $as established that the petitioners abandoned their /obs to $or% for another
company. Private respondent, ho$ever, did not follo$ the notice re2uirements and
instead argued that sending notices to the last %no$n addresses $ould have been
useless because they did not reside there anymore. =nfortunately for the private
respondent, this is not a valid e>cuse because the la$ mandates the t$in notice
re2uirements to the employee-s last %no$n address. .hus, it should be held liable for
non<compliance $ith the procedural re2uirements of due process.
.he 1ourt ruled that respondent is liable for petitioners- holiday pay, service incentive
leave pay and #
th
month pay $ithout deductions. .he evident intention of Presidential
'ecree ,o. (? is to grant an additional income in the form of the #
th
month pay to
employees not already receiving the same so as @to further protect the level of real
$ages from the ravages of $orld<$ide inAation.B 1learly, as additional income, the #
th
month pay is included in the de&nition of $age under Article !34f5 of the )abor 1ode.
AGABON VS. NATIONAL LABOR RELATIONS COMMISSION
G.R. No. 158693. November 17, 2!
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/)& &%#%0%or3 r)./%&.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 158693 November 17, 2004
JENN M. !G!"ON #$% &'RG'('O C. !G!"ON, petitioners,
vs.
N!T'ON!( (!"OR RE(!T'ONS COMM'SS'ON )N(RC*, R'&'ER! +OME 'MPRO&EMENTS, 'NC.
#$% &'CENTE !NGE(ES, respondents.
,EC'S'ON
N!RES-S!NT'!GO, J..
This petition for review seeks to reverse the decision

of the Court of Appeals dated !anuar" #$,


#%%$, in CA&'.R. (P No. )$%*, +odif"in, the decision of National -abor Relations Co++ission
.N-RC/ in N-RC&NCR Case No. %#$00#&%%.
Private respondent Riviera 1o+e 2+prove+ents, 2nc. is en,a,ed in the business of sellin, and
installin, orna+ental and construction +aterials. 2t e+plo"ed petitioners 3ir,ilio A,abon and !enn"
A,abon as ,"psu+ board and cornice installers on !anuar" #, 44#
#
until 5ebruar" #$, 444 when
the" were dis+issed for abandon+ent of work.
Petitioners then filed a co+plaint for ille,al dis+issal and pa"+ent of +one" clai+s
$
and on
6ece+ber #7, 444, the -abor Arbiter rendered a decision declarin, the dis+issals ille,al and
ordered private respondent to pa" the +onetar" clai+s. The dispositive portion of the decision
states8
91ERE5:RE, pre+ises considered, 9e find the ter+ination of the co+plainants ille,al.
Accordin,l", respondent is hereb" ordered to pa" the+ their backwa,es up to Nove+ber #4,
444 in the su+ of8
. !enn" M. A,abon & P;), #$.4$
#. 3ir,ilio C. A,abon & ;), #$.4$
and, in lieu of reinstate+ent to pa" the+ their separation pa" of one ./ +onth for ever" "ear
of service fro+ date of hirin, up to Nove+ber #4, 444.
Respondent is further ordered to pa" the co+plainants their holida" pa" and service
incentive leave pa" for the "ears 44), 44* and 447 as well as their pre+iu+ pa" for
holida"s and rest da"s and 3ir,ilio A,abon<s $th +onth pa" differential a+ountin, to T9:
T1:=(AN6 :NE 1=N6RE6 525T> .P#,;%.%%/ Pesos, or the a,,re,ate a+ount of :NE
1=N6RE6 T9ENT> :NE T1:=(AN6 (2? 1=N6RE6 (E3ENT> E2'1T @ 4$A%%
.P#,)*7.4$/ Pesos for !enn" A,abon, and :NE 1=N6RE6 T9ENT> T1REE
T1:=(AN6 E2'1T 1=N6RE6 T9ENT> E2'1T @ 4$A%% .P#$,7#7.4$/ Pesos for 3ir,ilio
A,abon, as per attached co+putation of !ulieta C. Nicolas, :2C, Research and Co+putation
=nit, NCR.
(: :R6ERE6.
0
:n appeal, the N-RC reversed the -abor Arbiter because it found that the petitioners had
abandoned their work, and were not entitled to backwa,es and separation pa". The other +one"
clai+s awarded b" the -abor Arbiter were also denied for lack of evidence.
;
=pon denial of their +otion for reconsideration, petitioners filed a petition for certiorari with the Court
of Appeals.
The Court of Appeals in turn ruled that the dis+issal of the petitioners was not ille,al because the"
had abandoned their e+plo"+ent but ordered the pa"+ent of +one" clai+s. The dispositive portion
of the decision reads8
91ERE5:RE, the decision of the National -abor Relations Co++ission is RE3ER(E6 onl"
insofar as it dis+issed petitioner<s +one" clai+s. Private respondents are ordered to pa"
petitioners holida" pa" for four .0/ re,ular holida"s in 44), 44*, and 447, as well as their
service incentive leave pa" for said "ears, and to pa" the balance of petitioner 3ir,ilio
A,abon<s $th +onth pa" for 447 in the a+ount of P#,;%.%%.
(: :R6ERE6.
)
1ence, this petition for review on the sole issue of whether petitioners were ille,all" dis+issed.
*
Petitioners assert that the" were dis+issed because the private respondent refused to ,ive the+
assi,n+ents unless the" a,reed to work on a "pakyaw" basis when the" reported for dut" on
5ebruar" #$, 444. The" did not a,ree on this arran,e+ent because it would +ean losin, benefits
as (ocial (ecurit" ("ste+ .(((/ +e+bers. Petitioners also clai+ that private respondent did not
co+pl" with the twin reBuire+ents of notice and hearin,.
7
Private respondent, on the other hand, +aintained that petitioners were not dis+issed but had
abandoned their work.
4
2n fact, private respondent sent two letters to the last known addresses of the
petitioners advisin, the+ to report for work. Private respondent<s +ana,er even talked to petitioner
3ir,ilio A,abon b" telephone so+eti+e in !une 444 to tell hi+ about the new assi,n+ent at Pacific
PlaCa Towers involvin, 0%,%%% sBuare +eters of cornice installation work. 1owever, petitioners did
not report for work because the" had subcontracted to perfor+ installation work for another
co+pan". Petitioners also de+anded for an increase in their wa,e to P#7%.%% per da". 9hen this
was not ,ranted, petitioners stopped reportin, for work and filed the ille,al dis+issal case.
%
2t is well&settled that findin,s of fact of Buasi&Dudicial a,encies like the N-RC are accorded not onl"
respect but even finalit" if the findin,s are supported b" substantial evidence. This is especiall" so
when such findin,s were affir+ed b" the Court of Appeals.

1owever, if the factual findin,s of the


N-RC and the -abor Arbiter are conflictin,, as in this case, the reviewin, court +a" delve into the
records and eEa+ine for itself the Buestioned findin,s.
#
Accordin,l", the Court of Appeals, after a careful review of the facts, ruled that petitioners< dis+issal
was for a Dust cause. The" had abandoned their e+plo"+ent and were alread" workin, for another
e+plo"er.
To dis+iss an e+plo"ee, the law reBuires not onl" the eEistence of a Dust and valid cause but also
enDoins the e+plo"er to ,ive the e+plo"ee the opportunit" to be heard and to defend
hi+self.
$
Article #7# of the -abor Code enu+erates the Dust causes for ter+ination b" the e+plo"er8
.a/ serious +isconduct or willful disobedience b" the e+plo"ee of the lawful orders of his e+plo"er
or the latter<s representative in connection with the e+plo"ee<s workF .b/ ,ross and habitual ne,lect
b" the e+plo"ee of his dutiesF .c/ fraud or willful breach b" the e+plo"ee of the trust reposed in hi+
b" his e+plo"er or his dul" authoriCed representativeF .d/ co++ission of a cri+e or offense b" the
e+plo"ee a,ainst the person of his e+plo"er or an" i++ediate +e+ber of his fa+il" or his dul"
authoriCed representativeF and .e/ other causes analo,ous to the fore,oin,.
Abandon+ent is the deliberate and unDustified refusal of an e+plo"ee to resu+e his e+plo"+ent.
0
2t
is a for+ of ne,lect of dut", hence, a Dust cause for ter+ination of e+plo"+ent b" the e+plo"er.
;
5or
a valid findin, of abandon+ent, these two factors should be present8 ./ the failure to report for work
or absence without valid or Dustifiable reasonF and .#/ a clear intention to sever e+plo"er&e+plo"ee
relationship, with the second as the +ore deter+inative factor which is +anifested b" overt acts fro+
which it +a" be deduced that the e+plo"ees has no +ore intention to work. The intent to
discontinue the e+plo"+ent +ust be shown b" clear proof that it was deliberate and unDustified.
)
2n 5ebruar" 444, petitioners were freBuentl" absent havin, subcontracted for an installation work
for another co+pan". (ubcontractin, for another co+pan" clearl" showed the intention to sever the
e+plo"er&e+plo"ee relationship with private respondent. This was not the first ti+e the" did this. 2n
!anuar" 44), the" did not report for work because the" were workin, for another co+pan". Private
respondent at that ti+e warned petitioners that the" would be dis+issed if this happened a,ain.
Petitioners disre,arded the warnin, and eEhibited a clear intention to sever their e+plo"er&e+plo"ee
relationship. The record of an e+plo"ee is a relevant consideration in deter+inin, the penalt" that
should be +eted out to hi+.
*
2n Sandoval Shipyard v. Clave,
7
we held that an e+plo"ee who deliberatel" absented fro+ work
without leave or per+ission fro+ his e+plo"er, for the purpose of lookin, for a Dob elsewhere, is
considered to have abandoned his Dob. 9e should appl" that rule with +ore reason here where
petitioners were absent because the" were alread" workin, in another co+pan".
The law i+poses +an" obli,ations on the e+plo"er such as providin, Dust co+pensation to workers,
observance of the procedural reBuire+ents of notice and hearin, in the ter+ination of e+plo"+ent.
:n the other hand, the law also reco,niCes the ri,ht of the e+plo"er to eEpect fro+ its workers not
onl" ,ood perfor+ance, adeBuate work and dili,ence, but also ,ood conduct
4
and lo"alt". The
e+plo"er +a" not be co+pelled to continue to e+plo" such persons whose continuance in the
service will patentl" be ini+ical to his interests.
#%
After establishin, that the ter+inations were for a Dust and valid cause, we now deter+ine if the
procedures for dis+issal were observed.
The procedure for ter+inatin, an e+plo"ee is found in Book 32, Rule 2, (ection #.d/ of the Omnibus
Rules Implementing the Labor Code8
Standards of due process re!uirements of notice. G 2n all cases of ter+ination of
e+plo"+ent, the followin, standards of due process shall be substantiall" observed8
2. 5or ter+ination of e+plo"+ent based on Dust causes as defined in Article #7# of the Code8
.a/ A written notice served on the e+plo"ee specif"in, the ,round or ,rounds for ter+ination,
and ,ivin, to said e+plo"ee reasonable opportunit" within which to eEplain his sideF
.b/ A hearin, or conference durin, which the e+plo"ee concerned, with the assistance of
counsel if the e+plo"ee so desires, is ,iven opportunit" to respond to the char,e, present his
evidence or rebut the evidence presented a,ainst hi+F and
.c/ A written notice of ter+ination served on the e+plo"ee indicatin, that upon due
consideration of all the circu+stances, ,rounds have been established to Dustif" his
ter+ination.
2n case of ter+ination, the fore,oin, notices shall be served on the e+plo"ee<s last known
address.
6is+issals based on Dust causes conte+plate acts or o+issions attributable to the e+plo"ee while
dis+issals based on authoriCed causes involve ,rounds under the -abor Code which allow the
e+plo"er to ter+inate e+plo"ees. A ter+ination for an authoriCed cause reBuires pa"+ent of
separation pa". 9hen the ter+ination of e+plo"+ent is declared ille,al, reinstate+ent and full
backwa,es are +andated under Article #*4. 2f reinstate+ent is no lon,er possible where the
dis+issal was unDust, separation pa" +a" be ,ranted.
Procedurall", ./ if the dis+issal is based on a Dust cause under Article #7#, the e+plo"er +ust ,ive
the e+plo"ee two written notices and a hearin, or opportunit" to be heard if reBuested b" the
e+plo"ee before ter+inatin, the e+plo"+ent8 a notice specif"in, the ,rounds for which dis+issal is
sou,ht a hearin, or an opportunit" to be heard and after hearin, or opportunit" to be heard, a notice
of the decision to dis+issF and .#/ if the dis+issal is based on authoriCed causes under Articles #7$
and #70, the e+plo"er +ust ,ive the e+plo"ee and the 6epart+ent of -abor and E+plo"+ent
written notices $% da"s prior to the effectivit" of his separation.
5ro+ the fore,oin, rules four possible situations +a" be derived8 ./ the dis+issal is for a Dust cause
under Article #7# of the -abor Code, for an authoriCed cause under Article #7$, or for health reasons
under Article #70, and due process was observedF .#/ the dis+issal is without Dust or authoriCed
cause but due process was observedF .$/ the dis+issal is without Dust or authoriCed cause and there
was no due processF and .0/ the dis+issal is for Dust or authoriCed cause but due process was not
observed.
2n the first situation, the dis+issal is undoubtedl" valid and the e+plo"er will not suffer an" liabilit".
2n the second and third situations where the dis+issals are ille,al, Article #*4 +andates that the
e+plo"ee is entitled to reinstate+ent without loss of seniorit" ri,hts and other privile,es and full
backwa,es, inclusive of allowances, and other benefits or their +onetar" eBuivalent co+puted fro+
the ti+e the co+pensation was not paid up to the ti+e of actual reinstate+ent.
2n the fourth situation, the dis+issal should be upheld. 9hile the procedural infir+it" cannot be
cured, it should not invalidate the dis+issal. 1owever, the e+plo"er should be held liable for non"
compliance with the procedural re!uirements of due process.
The present case sBuarel" falls under the fourth situation. The dis+issal should be upheld because
it was established that the petitioners abandoned their Dobs to work for another co+pan". Private
respondent, however, did not follow the notice reBuire+ents and instead ar,ued that sendin, notices
to the last known addresses would have been useless because the" did not reside there an"+ore.
=nfortunatel" for the private respondent, this is not a valid eEcuse because the law +andates the
twin notice reBuire+ents to the e+plo"ee<s last known address.
#
Thus, it should be held liable for
non"compliance with the procedural re!uirements of due process.
A review and re&eEa+ination of the relevant le,al principles is appropriate and ti+el" to clarif" the
various rulin,s on e+plo"+ent ter+ination in the li,ht of Serrano v. #ational Labor Relations
Commission.
##
Prior to 474, the rule was that a dis+issal or ter+ination is ille,al if the e+plo"ee was not ,iven an"
notice. 2n the 474 case of $enphil Corp. v. #ational Labor Relations Commission,
#$
we reversed
this lon,&standin, rule and held that the dis+issed e+plo"ee, althou,h not ,iven an" notice and
hearin,, was not entitled to reinstate+ent and backwa,es because the dis+issal was for ,rave
+isconduct and insubordination, a Dust ,round for ter+ination under Article #7#. The e+plo"ee had a
violent te+per and caused trouble durin, office hours, def"in, superiors who tried to pacif" hi+. 9e
concluded that reinstatin, the e+plo"ee and awardin, backwa,es H+a" encoura,e hi+ to do even
worse and will render a +ocker" of the rules of discipline that e+plo"ees are reBuired to
observe.H
#0
9e further held that8
=nder the circu+stances, the dis+issal of the private respondent for Dust cause should be
+aintained. 1e has no ri,ht to return to his for+er e+plo"+ent.
1owever, the petitioner +ust nevertheless be held to account for failure to eEtend to private
respondent his ri,ht to an investi,ation before causin, his dis+issal. The rule is eEplicit as
above discussed. The dis+issal of an e+plo"ee +ust be for %ust or authori&ed cause and
after due process. Petitioner co++itted an infraction of the second reBuire+ent. Thus, it
+ust be i+posed a sanction for its failure to ,ive a for+al notice and conduct an
investi,ation as reBuired b" law before dis+issin, petitioner fro+ e+plo"+ent. Considerin,
the circu+stances of this case petitioner +ust inde+nif" the private respondent the a+ount
of P,%%%.%%. The +easure of this award depends on the facts of each case and the ,ravit"
of the o+ission co++itted b" the e+plo"er.
#;
The rule thus evolved8 where the e+plo"er had a valid reason to dis+iss an e+plo"ee but did not
follow the due process reBuire+ent, the dis+issal +a" be upheld but the e+plo"er will be penaliCed
to pa" an inde+nit" to the e+plo"ee. This beca+e known as the $enphil or Belated 6ue Process
Rule.
:n !anuar" #*, #%%%, in Serrano, the rule on the eEtent of the sanction was chan,ed. 9e held that
the violation b" the e+plo"er of the notice reBuire+ent in ter+ination for Dust or authoriCed causes
was not a denial of due process that will nullif" the ter+ination. 1owever, the dis+issal is ineffectual
and the e+plo"er +ust pa" full backwa,es fro+ the ti+e of ter+ination until it is Dudiciall" declared
that the dis+issal was for a Dust or authoriCed cause.
The rationale for the re&eEa+ination of the $enphil doctrine in Serrano was the si,nificant nu+ber of
cases involvin, dis+issals without reBuisite notices. 9e concluded that the i+position of penalt" b"
wa" of da+a,es for violation of the notice reBuire+ent was not servin, as a deterrent. 1ence, we
now reBuired pa"+ent of full backwa,es fro+ the ti+e of dis+issal until the ti+e the Court finds the
dis+issal was for a Dust or authoriCed cause.
Serrano was confrontin, the practice of e+plo"ers to Hdis+iss now and pa" laterH b" i+posin, full
backwa,es.
9e believe, however, that the rulin, in Serrano did not consider the full +eanin, of Article #*4 of the
-abor Code which states8
ART. #*4. (ecurit" of Tenure. G 2n cases of re,ular e+plo"+ent, the e+plo"er shall not
ter+inate the services of an e+plo"ee eEcept for a Dust cause or when authoriCed b" this
Title. An e+plo"ee who is unDustl" dis+issed fro+ work shall be entitled to reinstate+ent
without loss of seniorit" ri,hts and other privile,es and to his full backwa,es, inclusive of
allowances, and to his other benefits or their +onetar" eBuivalent co+puted fro+ the ti+e
his co+pensation was withheld fro+ hi+ up to the ti+e of his actual reinstate+ent.
This +eans that the ter+ination is ille,al onl" if it is not for an" of the Dustified or authoriCed causes
provided b" law. Pa"+ent of backwa,es and other benefits, includin, reinstate+ent, is Dustified onl"
if the e+plo"ee was unDustl" dis+issed.
The fact that the Serrano rulin, can cause unfairness and inDustice which elicited stron, dissent has
pro+pted us to revisit the doctrine.
To be sure, the 6ue Process Clause in Article 222, (ection of the Constitution e+bodies a s"ste+ of
ri,hts based on +oral principles so deepl" i+bedded in the traditions and feelin,s of our people as
to be dee+ed funda+ental to a civiliCed societ" as conceived b" our entire histor". 6ue process is
that which co+ports with the deepest notions of what is fair and ri,ht and Dust.
#)
2t is a constitutional
restraint on the le,islative as well as on the eEecutive and Dudicial powers of the ,overn+ent
provided b" the Bill of Ri,hts.
6ue process under the -abor Code, like Constitutional due process, has two aspects8
substantive, i.e., the valid and authoriCed causes of e+plo"+ent ter+ination under the -abor CodeF
and procedural, i.e., the +anner of dis+issal. Procedural due process reBuire+ents for dis+issal are
found in the 2+ple+entin, Rules of P.6. 00#, as a+ended, otherwise known as the -abor Code of
the Philippines in Book 32, Rule 2, (ec. #, as a+ended b" 6epart+ent :rder Nos. 4 and
%.
#*
Breaches of these due process reBuire+ents violate the -abor Code. Therefore statutory due
process should be differentiated fro+ failure to co+pl" with constitutional due process.
Constitutional due process protects the individual fro+ the ,overn+ent and assures hi+ of his ri,hts
in cri+inal, civil or ad+inistrative proceedin,sF while statutory due process found in the -abor Code
and 2+ple+entin, Rules protects e+plo"ees fro+ bein, unDustl" ter+inated without Dust cause after
notice and hearin,.
2n Sebuguero v. #ational Labor Relations Commission,
#7
the dis+issal was for a Dust and valid cause
but the e+plo"ee was not accorded due process. The dis+issal was upheld b" the Court but the
e+plo"er was sanctioned. The sanction should be in the nature of inde+nification or penalt", and
depends on the facts of each case and the ,ravit" of the o+ission co++itted b" the e+plo"er.
2n #ath v. #ational Labor Relations Commission,
#4
it was ruled that even if the e+plo"ee was not
,iven due process, the failure did not operate to eradicate the Dust causes for dis+issal. The
dis+issal bein, for Dust cause,albeit without due process, did not entitle the e+plo"ee to
reinstate+ent, backwa,es, da+a,es and attorne"<s fees.
Mr. !ustice !ose C. 3itu,, in his separate opinion in '(( 'arine Services) Inc. v. #ational Labor
Relations Commission,
$%
which opinion he reiterated in Serrano, stated8
C. 9here there is Dust cause for dis+issal but due process has not been properl" observed
b" an e+plo"er, it would not be ri,ht to order either the reinstate+ent of the dis+issed
e+plo"ee or the pa"+ent of backwa,es to hi+. 2n failin,, however, to co+pl" with the
procedure prescribed b" law in ter+inatin, the services of the e+plo"ee, the e+plo"er +ust
be dee+ed to have opted or, in an" case, should be +ade liable, for the pa"+ent of
separation pa". 2t +i,ht be pointed out that the notice to be ,iven and the hearin, to be
conducted ,enerall" constitute the two&part due process reBuire+ent of law to be accorded
to the e+plo"ee b" the e+plo"er. Nevertheless, peculiar circu+stances +i,ht obtain in
certain situations where to undertake the above steps would be no +ore than a useless
for+alit" and where, accordin,l", it would not be i+prudent to appl" the res ipsa lo!uitur rule
and award, in lieu of separation pa", no+inal da+a,es to the e+plo"ee. E E E.
$
After carefull" anal"Cin, the conseBuences of the diver,ent doctrines in the law on e+plo"+ent
ter+ination, we believe that in cases involvin, dis+issals for cause but without observance of the
twin reBuire+ents of notice and hearin,, the better rule is to abandon the (errano doctrine and to
follow $enphil b" holdin, that the dis+issal was for Dust cause but i+posin, sanctions on the
e+plo"er. (uch sanctions, however, +ust be stiffer than that i+posed in $enphil. B" doin, so, this
Court would be able to achieve a fair result b" dispensin, Dustice not Dust to e+plo"ees, but to
e+plo"ers as well.
The unfairness of declarin, ille,al or ineffectual dis+issals for valid or authoriCed causes but not
co+pl"in, with statutor" due process +a" have far&reachin, conseBuences.
This would encoura,e frivolous suits, where even the +ost notorious violators of co+pan" polic" are
rewarded b" invokin, due process. This also creates absurd situations where there is a Dust or
authoriCed cause for dis+issal but a procedural infir+it" invalidates the ter+ination. -et us take for
eEa+ple a case where the e+plo"ee is cau,ht stealin, or threatens the lives of his co&e+plo"ees or
has beco+e a cri+inal, who has fled and cannot be found, or where serious business losses
de+and that operations be ceased in less than a +onth. 2nvalidatin, the dis+issal would not serve
public interest. 2t could also discoura,e invest+ents that can ,enerate e+plo"+ent in the local
econo+".
The constitutional polic" to provide full protection to labor is not +eant to be a sword to oppress
e+plo"ers. The co++it+ent of this Court to the cause of labor does not prevent us fro+ sustainin,
the e+plo"er when it is in the ri,ht, as in this case.
$#
Certainl", an e+plo"er should not be co+pelled
to pa" e+plo"ees for work not actuall" perfor+ed and in fact abandoned.
The e+plo"er should not be co+pelled to continue e+plo"in, a person who is ad+ittedl" ,uilt" of
+isfeasance or +alfeasance and whose continued e+plo"+ent is patentl" ini+ical to the e+plo"er.
The law protectin, the ri,hts of the laborer authoriCes neither oppression nor self&destruction of the
e+plo"er.
$$
2t +ust be stressed that in the present case, the petitioners co++itted a ,rave offense, i.e.,
abandon+ent, which, if the reBuire+ents of due process were co+plied with, would undoubtedl"
result in a valid dis+issal.
An e+plo"ee who is clearl" ,uilt" of conduct violative of Article #7# should not be protected b" the
(ocial !ustice Clause of the Constitution. (ocial Dustice, as the ter+ su,,ests, should be used onl"
to correct an inDustice. As the e+inent !ustice !ose P. -aurel observed, social Dustice +ust be
founded on the reco,nition of the necessit" of interdependence a+on, diverse units of a societ" and
of the protection that should be eBuall" and evenl" eEtended to all ,roups as a co+bined force in our
social and econo+ic life, consistent with the funda+ental and para+ount obDective of the state of
pro+otin, the health, co+fort, and Buiet of all persons, and of brin,in, about Hthe ,reatest ,ood to
the ,reatest nu+ber.H
$0
This is not to sa" that the Court was wron, when it ruled the wa" it did in $enphil, Serrano and
related cases. (ocial Dustice is not based on ri,id for+ulas set in stone. 2t has to allow for chan,in,
ti+es and circu+stances.
!ustice 2sa,ani CruC stron,l" asserts the need to appl" a balanced approach to labor&+ana,e+ent
relations and dispense Dustice with an even hand in ever" case8
9e have repeatedl" stressed that social Dustice G or an" Dustice for that +atter G is for the
deservin,, whether he be a +illionaire in his +ansion or a pauper in his hovel. 2t is true that,
in case of reasonable doubt, we are to tilt the balance in favor of the poor to who+ the
Constitution fittin,l" eEtends its s"+path" and co+passion. But never is it Dustified to ,ive
preference to the poor si+pl" because the" are poor, or reDect the rich si+pl" because the"
are rich, for Dustice +ust alwa"s be served for the poor and the rich alike, accordin, to the
+andate of the law.
$;
!ustice in ever" case should onl" be for the deservin, part". 2t should not be presu+ed that ever"
case of ille,al dis+issal would auto+aticall" be decided in favor of labor, as +ana,e+ent has ri,hts
that should be full" respected and enforced b" this Court. As interdependent and indispensable
partners in nation&buildin,, labor and +ana,e+ent need each other to foster productivit" and
econo+ic ,rowthF hence, the need to wei,h and balance the ri,hts and welfare of both the e+plo"ee
and e+plo"er.
9here the dis+issal is for a Dust cause, as in the instant case, the lack of statutor" due process
should not nullif" the dis+issal, or render it ille,al, or ineffectual. 1owever, the e+plo"er should
inde+nif" the e+plo"ee for the violation of his statutor" ri,hts, as ruled in Reta v. #ational Labor
Relations Commission.
$)
The inde+nit" to be i+posed should be stiffer to discoura,e the abhorrent
practice of Hdis+iss now, pa" later,H which we sou,ht to deter in the Serrano rulin,. The sanction
should be in the nature of inde+nification or penalt" and should depend on the facts of each case,
takin, into special consideration the ,ravit" of the due process violation of the e+plo"er.
=nder the Civil Code, no+inal da+a,es is adDudicated in order that a ri,ht of the plaintiff, which has
been violated or invaded b" the defendant, +a" be vindicated or reco,niCed, and not for the purpose
of inde+nif"in, the plaintiff for an" loss suffered b" hi+.
$*
As enunciated b" this Court in *iernes v. #ational Labor Relations Commissions,
$7
an e+plo"er is
liable to pa" inde+nit" in the for+ of no+inal da+a,es to an e+plo"ee who has been dis+issed if,
in effectin, such dis+issal, the e+plo"er fails to co+pl" with the reBuire+ents of due process. The
Court, after considerin, the circu+stances therein, fiEed the inde+nit" at P#,;4%.;%, which was
eBuivalent to the e+plo"ee<s one +onth salar". This inde+nit" is intended not to penaliCe the
e+plo"er but to vindicate or reco,niCe the e+plo"ee<s ri,ht to statutor" due process which was
violated b" the e+plo"er.
$4
The violation of the petitioners< ri,ht to statutor" due process b" the private respondent warrants the
pa"+ent of inde+nit" in the for+ of no+inal da+a,es. The a+ount of such da+a,es is addressed
to the sound discretion of the court, takin, into account the relevant circu+stances.
0%
Considerin, the
prevailin, circu+stances in the case at bar, we dee+ it proper to fiE it at P$%,%%%.%%. 9e believe this
for+ of da+a,es would serve to deter e+plo"ers fro+ future violations of the statutor" due process
ri,hts of e+plo"ees. At the ver" least, it provides a vindication or reco,nition of this funda+ental
ri,ht ,ranted to the latter under the -abor Code and its 2+ple+entin, Rules.
Private respondent clai+s that the Court of Appeals erred in holdin, that it failed to pa" petitioners<
holida" pa", service incentive leave pa" and $th +onth pa".
9e are not persuaded.
9e affir+ the rulin, of the appellate court on petitioners< +one" clai+s. Private respondent is liable
for petitioners< holida" pa", service incentive leave pa" and $th +onth pa" without deductions.
As a ,eneral rule, one who pleads pa"+ent has the burden of provin, it. Even where the e+plo"ee
+ust alle,e non&pa"+ent, the ,eneral rule is that the burden rests on the e+plo"er to prove
pa"+ent, rather than on the e+plo"ee to prove non&pa"+ent. The reason for the rule is that the
pertinent personnel files, pa"rolls, records, re+ittances and other si+ilar docu+ents G which will
show that overti+e, differentials, service incentive leave and other clai+s of workers have been paid
G are not in the possession of the worker but in the custod" and absolute control of the e+plo"er.
0
2n the case at bar, if private respondent indeed paid petitioners< holida" pa" and service incentive
leave pa", it could have easil" presented docu+entar" proofs of such +onetar" benefits to disprove
the clai+s of the petitioners. But it did not, eEcept with respect to the $th +onth pa" wherein it
presented cash vouchers showin, pa"+ents of the benefit in the "ears disputed.
0#
Alle,ations b"
private respondent that it does not operate durin, holida"s and that it allows its e+plo"ees % da"s
leave with pa", other than bein, self&servin,, do not constitute proof of pa"+ent. ConseBuentl", it
failed to dischar,e the onus probandi thereb" +akin, it liable for such clai+s to the petitioners.
Anent the deduction of ((( loan and the value of the shoes fro+ petitioner 3ir,ilio A,abon<s $th
+onth pa", we find the sa+e to be unauthoriCed. The evident intention of Presidential 6ecree No.
7; is to ,rant an additional income in the for+ of the $th +onth pa" to e+plo"ees not alread"
receivin, the sa+e
0$
so as Hto further protect the level of real wages from the ravages of world"wide
inflation.H
00
Clearl", as additional inco+e, the $th +onth pa" is included in the definition of wa,e
under Article 4*.f/ of the -abor Code, to wit8
.f/ H9a,eH paid to an" e+plo"ee shall +ean the re+uneration or earnin,s, however
desi,nated, capable of bein, eEpressed in ter+s of +one" whether fiEed or ascertained on a
ti+e, task, piece , or co++ission basis, or other +ethod of calculatin, the sa+e, which is
pa"able b" an e+plo"er to an e+plo"ee under a written or unwritten contract of e+plo"+ent
for work done or to be done, or for services rendered or to be rendered and includes the fair
and reasonable value, as deter+ined b" the (ecretar" of -abor, of board, lod,in,, or other
facilities custo+aril" furnished b" the e+plo"er to the e+plo"eeIH
fro+ which an e+plo"er is prohibited under Article $
0;
of the sa+e Code fro+ +akin, an"
deductions without the e+plo"ee<s knowled,e and consent. 2n the instant case, private respondent
failed to show that the deduction of the ((( loan and the value of the shoes fro+ petitioner 3ir,ilio
A,abon<s $th +onth pa" was authoriCed b" the latter. The lack of authorit" to deduct is further
bolstered b" the fact that petitioner 3ir,ilio A,abon included the sa+e as one of his +one" clai+s
a,ainst private respondent.
The Court of Appeals properl" reinstated the +onetar" clai+s awarded b" the -abor Arbiter orderin,
the private respondent to pa" each of the petitioners holida" pa" for four re,ular holida"s fro+ 44)
to 447, in the a+ount of P),;#%.%%, service incentive leave pa" for the sa+e period in the a+ount
of P$,#;;.%% and the balance of 3ir,ilio A,abon<s thirteenth +onth pa" for 447 in the a+ount of
P#,;%.%%.
/+ERE0ORE, in view of the fore,oin,, the petition is ,EN'E,. The decision of the Court of Appeals
dated !anuar" #$, #%%$, in CA&'.R. (P No. )$%*, findin, that petitioners< !enn" and 3ir,ilio
A,abon abandoned their work, and orderin, private respondent to pa" each of the petitioners
holida" pa" for four re,ular holida"s fro+ 44) to 447, in the a+ount of P),;#%.%%, service
incentive leave pa" for the sa+e period in the a+ount of P$,#;;.%% and the balance of 3ir,ilio
A,abon<s thirteenth +onth pa" for 447 in the a+ount of P#,;%.%% is!00'RME, with
the MO,'0'C!T'ON that private respondent Riviera 1o+e 2+prove+ents, 2nc. is
furtherOR,ERE, to pa" each of the petitioners the a+ount of P$%,%%%.%% as no+inal da+a,es for
non&co+pliance with statutor" due process.
No costs.
SO OR,ERE,.
+avide) ,r.) C.,.) -uno) -anganiban) .uisumbing) Sandoval"(utierre&) Carpio) /ustria"'artine&)
Corona) Carpio"'orales) Calle%o) Sr.) /&cuna) 0inga) Chico"#a&ario) and (arcia) ,,.) concur.
SEP!R!TE OP'N'ON
T'NG!, J.
2 concur in the result, the final disposition of the petition bein, correct. There is no den"in, the
i+portance of the Court<s rulin, toda", which should be considered as definitive as to the effect of
the failure to render the notice and hearin, reBuired under the -abor Code when an e+plo"ee is
bein, dis+issed for Dust causes, as defined under the sa+e law. The Court e+phaticall" reaffir+s
the rule that dis+issals for Dust cause are not invalidated due to the failure of the e+plo"er to
observe the proper notice and hearin, reBuire+ents under the -abor Code. At the sa+e ti+e,
The +ecision likewise establishes that the Civil Code provisions on da+a,es serve as the proper
fra+ework for the appropriate relief to the e+plo"ee dis+issed for Dust cause if the notice&hearin,
reBuire+ent is not +et. Serrano v. #LRC,

insofar as it is controllin, in dis+issals for unauthoriCed


causes, is no lon,er the controllin, precedent. An" and all previous rulin,s and state+ents of the
Court inconsistent with these deter+inations are now dee+ed 1$o2er#31ve.
M" views on the Buestions raised in this petition are co+prehensive, if 2 +a" so in all +odest". 2 offer
this opinion to discuss the reasonin, behind +" conclusions, pertainin, as the" do to Buestions of
funda+ental i+portance.
-rologue
The factual backdrop of the present -etition for Review is not novel. Petitioners clai+ that the" were
ille,all" dis+issed b" the respondents, who alle,e in turn that petitioners had actuall" abandoned
their e+plo"+ent. There is little difficult" in upholdin, the findin,s of the NR-C and the Court of
Appeals that petitioners are ,uilt" of abandon+ent, one of the Dust causes for ter+ination under the
-abor Code. >et, the records also show that the e+plo"er was re+iss in not ,ivin, the notice
reBuired b" the -abor CodeF hence, the resultant controvers" as to the le,al effect of such
failure vis"1"vis the warranted dis+issal.
:stensibl", the +atter has been settled b" our decision in Serrano
#
, wherein the Court ruled that the
failure to properl" observe the notice reBuire+ent did not render the dis+issal, whether for Dust or
authoriCed causes, null and void, for such violation was not a denial of the constitutional ri,ht to due
process, and that the +easure of appropriate da+a,es in such cases ou,ht to be the a+ount of
wa,es the e+plo"ee should have received were it not for the ter+ination of his e+plo"+ent without
prior notice.
$
(till, the Court has, for ,ood reason, opted to reeEa+ine the so&called Serrano doctrine
throu,h the present petition
/ntecedent 2acts
Respondent Riviera 1o+e 2+prove+ents, 2nc .Riviera 1o+e/ is en,a,ed in the +anufacture and
installation of ,"psu+ board and cornice. 2n !anuar" of 44#, the A,abons were hired in !anuar" of
44# as cornice installers b" Riviera 1o+e. Accordin, to their personnel file with Riviera 1o+e, the
A,abon ,iven address was $R6( Tailorin,, E. Rodri,ueC Ave., Moonwalk (ubdivision, P&22
ParaJaBue Cit", Metro Manila.
0
2t is not disputed that so+eti+e around 5ebruar" 444, the A,abons stopped renderin, services for
Riviera 1o+e. The A,abons alle,e that be,innin, on #$ 5ebruar" 444, the" stopped receivin,
assi,n+ents fro+ Riviera 1o+e.
;
9hen the" de+anded an eEplanation, the +ana,er of Riviera
1o+es, Marivic 3entura, infor+ed the+ that the" would be hired a,ain, but on a Hpak"awH .piece&
work/ basis. 9hen the A,abons spurned this proposal, Riviera 1o+es refused to continue their
e+plo"+ent under the ori,inal ter+s and a,ree+ent.
)
Takin, affront, the A,abons filed a co+plaint
for ille,al dis+issal with the National -abor Relations Co++ission .HN-RCH/.
Riviera 1o+es adverts to a different version of events leadin, to the filin, of the co+plaint for ille,al
dis+issal. 2t alle,ed that in the earl" Buarter of 444, the A,abons stopped reportin, for work with
Riviera. Two separate letters dated % March 444, were sent to the A,abons at the address
indicated in their personnel file. 2n these notices, the A,abons were directed to report for work
i++ediatel".
*
1owever, these notices were returned unserved with the notation HRT( Moved.H Then,
in !une of 444, 3ir,ilio A,abon infor+ed Riviera 1o+es b" telephone that he and !enn" A,abon
were read" to return to work for Riviera 1o+es, on the condition that their wa,es be first adDusted.
:n 7 !une 444, the A,abons went to Riviera 1o+es, and in a +eetin, with +ana,e+ent,
reBuested a wa,e increase of up to Two 1undred Ei,ht" Pesos .P#7%.%%/ a da". 9hen no
affir+ative response was offered b" Riviera 1o+es, the A,abons initiated the co+plaint before the
N-RC.
7
2n their -osition -aper, the A,abons likewise alle,ed that the" were reBuired to work even on
holida"s and rest da"s, but were never paid the le,al holida" pa" or the pre+iu+ pa" for holida" or
rest da". The" also asserted that the" were denied (ervice 2ncentive -eave pa", and that 3ir,ilio
A,abon was not ,iven his thirteenth .$th/ +onth pa" for the "ear 447.
4
After due deliberation, -abor Arbiter 6ais" '. Cauton&Barcelona rendered a +ecision dated #7
6ece+ber 444, findin, the ter+ination of the A,abons ille,al, and orderin, Riviera 1o+es to pa"
backwa,es in the su+ of 5ift" (iE Thousand Two 1undred Thirt" :ne Pesos and Ninet" Three
Centavos .P;),#$.4$/ each. The -abor Arbiter likewise ordered, in lieu of reinstate+ent, the
pa"+ent of separation pa" of one ./ +onth pa" for ever" "ear of service fro+ date of hirin, up to #4
Nove+ber 444, as well as the pa"+ent of holida" pa", service incentive leave pa", and pre+iu+
pa" for holida" and restda", plus thirteenth .$
th
/ +onth differential to 3ir,ilio A,abon.
%
2n so rulin,, the -abor Arbiter declared that Riviera 1o+es was unable to satisfactoril" refute the
A,abons< clai+ that the" were no lon,er ,iven work to do after #$ 5ebruar" 444 and that their
rehirin, was onl" on Hpak"awH basis. The -abor Arbiter also held that Riviera 1o+es failed to co+pl"
with the notice reBuire+ent, notin, that Riviera 1o+es well knew of the chan,e of address of the
A,abons, considerin, that the identification cards it issued stated a different address fro+ that on
the personnel file.

The -abor Arbiter asserted the principle that in all ter+ination cases, strict
co+pliance b" the e+plo"er with the de+ands of procedural and substantive due process is a
condition sine !ua non for the sa+e to be declared valid.
#
:n appeal, the N-RC (econd 6ivision set aside the -abor Arbiter<s +ecision and ordered the
dis+issal of the co+plaint for lack of +erit.
$
The N-RC held that the A,abons were not able to
refute the assertion that for the pa"roll period endin, on ; 5ebruar" 444, 3ir,ilio and !enn"
A,abon worked for onl" two and one&half .#K/ and three .$/ da"s, respectivel". 2t disputed the
earlier findin, that Riviera 1o+es had known of the chan,e in address, notin, that the address
indicated in the
identification cards was not the A,abons, but that of the persons who should be notified in case of
e+er,enc" concernin, the e+plo"ee.
0
Thus, proper service of the notice was dee+ed to have been
acco+plished. 5urther, the notices evinced ,ood reason to believe that the A,abons had not been
dis+issed, but had instead abandoned their Dobs b" refusin, to report for work.
2n support of its conclusion that the A,abons had abandoned their work, the N-RC also observed
that the A,abons did not seek reinstate+ent, but onl" separation pa". 9hile the choice of relief was
pre+ised b" the A,abons on their purported strained relations with Riviera 1o+es, the N-RC
pointed out that such clai+ was a+pl" belied b" the fact that the A,abons had actuall" sou,ht a
conference with Riviera 1o+es in !une of 444. The N-RC likewise found that the failure of the
-abor Arbiter to Dustif" the award of eEtraneous +one" clai+s, such as holida" and service incentive
leave pa", confir+ed that there was no proof to Dustif" such clai+s.
A -etition for Certiorari was pro+ptl" filed with the Court of Appeals b" the A,abons, i+putin, ,rave
abuse of discretion on the part of the N-RC in dis+issin, their co+plaint for ille,al dis+issal. 2n
a +ecision
;
dated #$ !anuar" #%%$, the Court of Appeals affir+ed the findin, that the A,abons had
abandoned their e+plo"+ent. 2t noted that the two ele+ents constitutin, abandon+ent had been
established, to wit8 the failure to report for work or absence without valid Dustifiable reason, andF a
clear intention to sever the e+plo"er&e+plo"ee relationship. The intent to sever the e+plo"er&
e+plo"ee relationship was buttressed b" the A,abon<s choice to seek not reinstate+ent, but
separation pa". The Court of Appeals likewise found that the service of the notices were valid, as the
A,abons did not notif" Riviera 1o+es of their chan,e of address, and thus the failure to return to
work despite notice a+ounted to abandon+ent of work.
1owever, the Court of Appeals reversed the N-RC as re,ards the denial of the clai+s for holida"
pa", service incentive leave pa", and the balance of 3ir,ilio A,abon<s thirteenth .$th/ +onth pa". 2t
ruled that the failure to adduce proof in support thereof was not fatal and that the burden of provin,
that such benefits had alread" been paid rested on Riviera 1o+es.
)
'iven that Riviera 1o+es failed
to present proof of pa"+ent to the A,abons of their holida" pa" and service incentive leave pa" for
the "ears 44), 44* and 447, the Court of Appeals chose to believe that such benefits had not
actuall" been received b" the e+plo"ees. 2t also ruled that the apparent deductions +ade b" Riviera
1o+es on the thirteenth .$th/ +onth pa" of 3ir,ilio A,abon violated (ection % of the Rules and
Re,ulations 2+ple+entin, Presidential 6ecree No. 7;.
*
Accordin,l", Riviera 1o+es was ordered to
pa" the A,abons holida" for four .0/ re,ular holida"s in 44), 44* and 447, as well as their
service incentive leave pa" for said "ears, and the balance of 3ir,ilio A,abon<s thirteenth .$th/
+onth pa" for 447 in the a+ount of Two Thousand :ne 1undred 5ift" Pesos .P#,;%.%%/.
7
2n their -etition for Review, the A,abons clai+ that the" had been ille,all" dis+issed, reassertin,
their version of events, thus8 ./ that the" had not been ,iven new assi,n+ents since #$ 5ebruar"
444F .#/ that the" were told that the" would onl" be re&hired on a Hpak"awH basis, andF .$/ that
Riviera 1o+es had knowin,l" sent the notices to their old address despite its knowled,e of their
chan,e of address as indicated in the identification cards.
4
5urther, the A,abons note that onl" one
notice was sent to each of the+, in violation of the rule that the e+plo"er +ust furnish two written
notices before ter+ination L the first to apprise the e+plo"ee of the cause for which dis+issal is
sou,ht, and the second to notif" the e+plo"ee of the decision of dis+issal.
#%
The A,abons likewise
+aintain that the" did not seek reinstate+ent owin, to the strained relations between the+ and
Riviera 1o+es.
The A,abons present to this Court onl" one issue, i.e.8 whether or not the" were ille,all" dis+issed
fro+ their e+plo"+ent.
#
There are several di+ensions thou,h to this issue which warrant full
consideration.
0he /bandonment +imension
Review of 2actual 2inding of /bandonment
As the +ecision points out, abandon+ent is characteriCed b" the failure to report for work or
absence without valid or Dustifiable reason, and a clear intention to sever the e+plo"er&e+plo"ee
relationship. The Buestion of whether or not an e+plo"ee has abandoned e+plo"+ent is essentiall"
a factual issue.
##
The N-RC and the Court of Appeals, both appropriate triers of fact, concluded that
the A,abons had actuall" abandoned their e+plo"+ent, thus there is little need for deep inBuir" into
the correctness of this factual findin,. There is no doubt that the A,abons stopped reportin, for work
so+eti+e in 5ebruar" of 444. And there is no evidence to support their assertion that such absence
was due to the deliberate failure of Riviera 1o+es to ,ive the+ work. There is also the fact, as noted
b" the N-RC and the Court of Appeals, that the A,abons did not pra" for reinstate+ent, but onl" for
separation
pa" and +one" clai+s.
#$
This failure indicates their disinterest in +aintainin, the e+plo"er&e+plo"ee
relationship and their unabated avowed intent to sever it. Their eEcuse that strained relations
between the+ and Riviera 1o+es rendered reinstate+ent no lon,er feasible was hardl" ,iven
credence b" the N-RC and the Court of Appeals.
#0
The contrar" conclusion arrived at b" the -abor Arbiter as re,ards abandon+ent is of little bearin, to
the case. All that the -abor Arbiter said on that point was that Riviera 1o+es was not able to refute
the A,abons< clai+ that the" were ter+inated on #$ 5ebruar" 444.
#;
The -abor Arbiter did not
eEplain wh" or how such findin, was reachh" or how such findin, was reachhe A,abons was +ore
credible than that of Riviera 1o+es<. Bein, bereft of reasonin,, the conclusion deserves scant
consideration.
Compliance with #otice Re!uirement
At the sa+e ti+e, both the N-RC and the Court of Appeals failed to consider the apparent fact that
the rules ,overnin, notice of ter+ination were not co+plied with b" Riviera 1o+es. (ection #, Book
3, Rule ??222 of the :+nibus Rules 2+ple+entin, the -abor Code .2+ple+entin, Rules/ specificall"
provides that for ter+ination of e+plo"+ent based on Dust causes as defined in Article #7#, there
+ust be8 ./ written notice served on the e+plo"ee specif"in, the ,rounds for ter+ination and ,ivin,
e+plo"ee reasonable opportunit" to eEplain hisAher sideF .#/ a hearin, or conference wherein the
e+plo"ee, with the assistance of counsel if so desired, is ,iven opportunit" to respond to the char,e,
present his evidence or rebut evidence presented a,ainst hi+AherF and .$/ written notice of
ter+ination served on the e+plo"ee indicatin, that upon due consideration of all the circu+stances,
,rounds have been established to Dustif" ter+ination.
At the sa+e ti+e, (ection #, Book 3, Rule ??222 of the 2+ple+entin, Rules does not reBuire strict
co+pliance with the above procedure, but onl" that the sa+e be Hsubstantiall" observed.H
Riviera 1o+es +aintains that the letters it sent on % March 444 to the A,abons sufficientl"
co+plied with the notice rule. These identicall" worded letters noted that the A,abons had stopped
workin, without per+ission that the" failed to return for work despite havin, been repeatedl" told to
report to the office and resu+e their e+plo"+ent.
#)
The letters ended with an invitation to the
A,abons to report back to the office and return to work.
#*
The apparent purpose of these letters was to advise the A,abons that the" were welco+e to return
back to work, and not to notif" the+ of the ,rounds of ter+ination. (till, considerin, that onl"
substantial co+pliance with the notice reBuire+ent is reBuired, 2 a+ prepared to sa" that the letters
sufficientl" confor+ to the first notice reBuired under the 2+ple+entin, Rules. The purpose of the first
notice is to dul" infor+ the e+plo"ee that a particular trans,ression is bein, considered a,ainst hi+
or her, and that an opportunit" is bein, offered for hi+ or her to respond to the char,es. The letters
served the purpose of infor+in, the A,abons of the pendin, +atters becloudin, their e+plo"+ent,
and eEtendin, the+ the opportunit" to clear the air.
Contrar" to the A,abons< clai+, the letter&notice was correctl" sent to the e+plo"ee<s last known
address, in co+pliance with the 2+ple+entin, Rules. There is no dispute that these letters were not
actuall" received b" the A,abons, as the" had apparentl" +oved out of the address indicated
therein. (till, the letters were sent to what Riviera 1o+es knew to be the A,abons< last known
address, as indicated in their personnel file. The A,abons insist that Riviera 1o+es had known of
the chan,e of address, offerin, as proof their co+pan" 26s which purportedl" print out their correct
new address. >et, as pointed out b" the N-RC and the Court of Appeals, the addresses indicated in
the 26s are not the A,abons, but that of the person who is to be notified in case on e+er,enc"
involve either or both of the A,abons.
The actual violation of the notice reBuire+ent b" Riviera 1o+es lies in its failure to serve on the
A,abons the second notice which should infor+ the+ of ter+ination. As the +ecision notes, Riviera
1o+es< ar,u+ent that sendin, the second notice was useless due to the chan,e of address is
inutile, since the 2+ple+entin, Rules plainl" reBuire that the notice of ter+ination should be served
at the e+plo"ee<s last known address.
The i+portance of sendin, the notice of ter+ination should not be trivialiCed. The ter+ination letter
serves as indubitable proof of loss of e+plo"+ent, and its receipt co+pels the e+plo"ee to evaluate
his or her neEt options. 9ithout such notice, the e+plo"ee +a" be left uncertain of his fateF thus, its
service is +andated b" the 2+ple+entin, Rules. Non&co+pliance with the notice rule, as evident in
this case, contravenes the 2+ple+entin, Rules. "43 %oe5 36e v1o7#31o$ 5erve 3o 1$v#71%#3e 36e
!8#bo$59 %15m155#7 :or ;453 <#45e=
The So-Called Constitutional Law Dimension
!ustices Puno and Pan,aniban opine that the A,abons should be reinstated as a conseBuence of
the violation of the notice reBuire+ent. 2 respectfull" disa,ree, for the reasons eEpounded below.
Constitutional Considerations
Of +ue -rocess and the #otice"3earing
Re!uirement in Labor 0ermination Cases
!ustice Puno proposes that the failure to render due notice and hearin, prior to dis+issal for Dust
cause constitutes a violation of the constitutional ri,ht to due process. This view, as acknowled,ed
b" !ustice Puno hi+self, runs contrar" to the Court<s pronounce+ent in Serrano v. #LRC
#7
that the
absence of due notice and hearin, prior to dis+issal, if for Dust cause, violates statutor" due process.
The ponencia of !ustice 3icente 3. MendoCa in Serrano provides this co,ent overview of the histor"
of the doctrine8
2ndeed, to contend that the notice reBuire+ent in the -abor Code is an aspect of due
process is to overlook the fact that Art. #7$ had its ori,in in Art. $%# of the (panish Code of
Co++erce of 77# which ,ave either part" to the e+plo"er&e+plo"ee relationship the ri,ht
to ter+inate their relationship b" ,ivin, notice to the other one +onth in advance. 2n lieu of
notice, an e+plo"ee could be laid off b" pa"in, hi+ a mesadaeBuivalent to his salar" for one
+onth. This provision was repealed b" Art. ##*% of the Civil Code, which took effect on
Au,ust $%, 4;%. But on !une #, 4;0, R.A. No. %;#, otherwise known as the Ter+ination
Pa" -aw, was enacted revivin, the +esada. :n !une #, 4;*, the law was a+ended b"
R.A. No. *7* providin, for the ,ivin, of advance notice for ever" "ear of service.
#4
=nder (ection of the Ter+ination Pa" -aw, an e+plo"er could dis+iss an e+plo"ee without Dust
cause b" servin, written notice on the e+plo"ee at least one +onth in advance or one&half +onth for
ever" "ear of service of the e+plo"ee, whichever was lon,er.
$%
5ailure to serve such written notice
entitled the e+plo"ee to co+pensation eBuivalent to his salaries or wa,es correspondin, to the
reBuired period of notice fro+ the date of ter+ination of his e+plo"+ent.
1owever, there was no si+ilar written notice reBuire+ent under the Ter+ination Pa" -aw if the
dis+issal of the e+plo"ee was for Dust cause. The Court, speakin, throu,h !ustice !B- Re"es, ruled
in -hil. Refining Co. v. (arcia8
$
MRepublicN Act %;#, as a+ended b" Republic Act *7*, i+pliedl" reco,niCes the ri,ht of the
e+plo"er to dis+iss his e+plo"ees .hired without definite period/ whether for Dust case, as
therein defined or enu+erated, or without it. ': 36ere be ;453 <#45e, 36e em27o>er 15 $o3
re?41re% 3o 5erve #$> $o31<e o: %15<6#r8e $or 3o %15b4r5e 3erm1$#31o$ 2#> 3o 36e
em27o>ee. EEE
$#
Clearl", the Court, prior to the enact+ent of the -abor Code, was ill&receptive to the notion that
ter+ination for Dust cause without notice or hearin, violated the constitutional ri,ht to due process.
Nonetheless, the Court reco,niCed an award of da+a,es as the appropriate re+ed". 2n (alsim v.
-#4,
$$
the Court held8
:f course, the e+plo"er<s prero,ative to dis+iss e+plo"ees hired without a definite period
+a" be with or without cause. But if the +anner in which such ri,ht is eEercised is abusive,
the e+plo"er stands to answer to the dis+issed e+plo"ee for da+a,es.
$0
The Ter+ination Pa" -aw was a+on, the repealed laws with the enact+ent of the -abor Code in
4*0. (i,nificantl", the -abor Code, in its inception, did not reBuire notice or hearin, before an
e+plo"er could ter+inate an e+plo"ee for Dust cause. As !ustice MendoCa eEplained8
9here the ter+ination of e+plo"+ent was for a Dust cause, no notice was reBuired to be
,iven to the e+plo"ee. 2t was onl" on (epte+ber 0, 47 that notice was reBuired to be
,iven even where the dis+issal or ter+ination of an e+plo"ee was for cause. This was +ade
in the rules issued b" the then Minister of -abor and E+plo"+ent to i+ple+ent B.P. Bl,. $%
which a+ended the -abor Code. And it was still +uch later when the notice reBuire+ent was
e+bodied in the law with the a+end+ent of Art. #**.b/ b" R.A. No. )*; on March #, 474.
$;
2t cannot be denied thou,h that the thinkin, that absence of notice or hearin, prior to ter+ination
constituted a constitutional violation has ,ained a Durisprudential foothold with the Court. !ustice
Puno, in his +issenting Opinion, cites several cases in support of this theor", be,innin,
with 4atangas Laguna 0ayabas 4us Co. v. Court of /ppeals
$)
wherein we held that Hthe failure of
petitioner to ,ive the private respondent the benefit of a hearin, before he was dis+issed constitutes
an infrin,e+ent on his constitutional ri,ht to due process of law.
$*
(till, this theor" has been refuted, pellucidl" and effectivel" to +" +ind, b" !ustice MendoCa<s
disBuisition inSerrano, thus8
EEE There are three reasons wh", on the other hand, violation b" the e+plo"er of the notice
reBuire+ent cannot be considered a denial of due process resultin, in the nullit" of the
e+plo"ee<s dis+issal or la"off.
The first is that the 6ue Process Clause of the Constitution is a li+itation on ,overn+ental
powers. 2t does not appl" to the eEercise of private power, such as the ter+ination of
e+plo"+ent under the -abor Code. This is plain fro+ the teEt of Art. 222, O of the
Constitution, viC.8 HNo person shall be deprived of life, libert", or propert" without due process
of law. . . .H The reason is si+ple8 :nl" the (tate has authorit" to take the life, libert", or
propert" of the individual. The purpose of the 6ue Process Clause is to ensure that the
eEercise of this power is consistent with what are considered civiliCed +ethods.
The second reason is that notice and hearin, are reBuired under the 6ue Process Clause
before the power of or,aniCed societ" are brou,ht to bear upon the individual. This is
obviousl" not the case of ter+ination of e+plo"+ent under Art. #7$. 1ere the e+plo"ee is
not faced with an aspect of the adversar" s"ste+. The purpose for reBuirin, a $%&da" written
notice before an e+plo"ee is laid off is not to afford hi+ an opportunit" to be heard on an"
char,e a,ainst hi+, for there is none. The purpose rather is to ,ive hi+ ti+e to prepare for
the eventual loss of his Dob and the 6:-E an opportunit" to deter+ine whether econo+ic
causes do eEist Dustif"in, the ter+ination of his e+plo"+ent.
EEE
The third reason wh" the notice reBuire+ent under Art. #7$ can not be considered a
reBuire+ent of the 6ue Process Clause is that the e+plo"er cannot reall" be eEpected to be
entirel" an i+partial Dud,e of his own cause. This is also the case in ter+ination of
e+plo"+ent for a Dust cause under Art. #7# .i.e., serious +isconduct or willful disobedience
b" the e+plo"ee of the lawful orders of the e+plo"er, ,ross and habitual ne,lect of duties,
fraud or willful breach of trust of the e+plo"er, co++ission of cri+e a,ainst the e+plo"er or
the latter<s i++ediate fa+il" or dul" authoriCed representatives, or other analo,ous cases/.
$7
The Court in the land+ark case of -eople v. 'arti
$4
clarified the proper di+ensions of the Bill of
Ri,hts.
That the Bill of Ri,hts e+bodied in the Constitution is not +eant to be invoked a,ainst acts
of private individuals finds support in the deliberations of the Constitutional Co++ission.
True, the liberties ,uaranteed b" the funda+ental law of the land +ust alwa"s be subDect to
protection. But protection a,ainst who+P Co++issioner Bernas in his sponsorship speech in
the Bill of Ri,hts answers the Buer" which he hi+self posed, as follows8
H5irst, the ,eneral reflections. The protection of funda+ental liberties in the essence
of constitutional de+ocrac". Protection a,ainst who+P Protection a,ainst the state.
The Bill of Ri,hts ,overns the relationship between the individual and the state. 2ts
concern is not the relation between individuals, between a private individual and
other individuals. 9hat the Bill of Ri,hts does is to declare so+e forbidden Cones in
the private sphere inaccessible to an" power holder.H .(ponsorship (peech of
Co++issioner BernasF Record of the Constitutional Co++ission, 3ol. , p. )*0F !ul"
*,47)F 2talics supplied/
0%
2 do not doubt that reBuirin, notice and hearin, prior to ter+ination for Dust cause is an ad+irable
senti+ent borne out of basic eBuit" and fairness. (till, it is not a constitutional reBuire+ent that can
i+pose itself on the relations of private persons and entities. (i+pl" put, the Bill of Ri,hts affords
protection a,ainst possible (tate oppression a,ainst its citiCens, but not a,ainst an unDust or
repressive conduct b" a private part" towards another.
!ustice Puno characteriCes the notion that constitutional due process li+its ,overn+ent action alone
as @pass5 ,Hand adverts to nouvelle vague theories which assert that private conduct +a" be
restrained b" constitutional due process. 1is dissent alludes to the A+erican eEperience +akin,
references to the post&Civil 9arApre&9orld 9ar 22 era when the =( (upre+e Court see+ed overl"
solicitous to the ri,hts of bi, business over those of the workers.
Theories, no +atter how entrancin,, re+ain theoretical unless adopted b" le,islation, or +ore
controversiall", b" Dudicial opinion. There were a few decisions of the =( (upre+e Court that,
ostensibl", i+posed on private persons the values of the constitutional ,uarantees. 1owever, in
decidin, the cases, the A+erican 1i,h Court found it necessar" to link the actors to adeBuate
ele+ents of the H(tateH since the 5ourteenth A+end+ent plainl" be,ins with the words HNo (tate
shallIH
0
More cruciall" to the A+erican eEperience, it had beco+e necessar" to pass le,islation in order to
co+pel private persons to observe constitutional values. 9hile the eBual protection clause was
dee+ed sufficient b" the 9arren Court to bar racial se,re,ation in public facilities, it necessitated
enact+ent of the Civil Ri,hts Acts of 4)0 to prohibit se,re,ation as enforced b" private persons
within their propert". 2n this Durisdiction, 2 have trust in the statutor" re,i+e that ,overns the
correction of private wron,s. There are thousands of statutes, so+e penal or re,ulator" in nature,
that are the source of actionable clai+s a,ainst private persons. There is even no stoppin, the
(tate, throu,h the le,islative cauldron, fro+ co+pellin, private individuals, under pain of le,al
sanction, into observin, the nor+s ordained in the Bill of Ri,hts.
!ustice Pan,aniban<s Separate Opinion asserts that corporate behe+oths and even individuals +a"
now be sources of abuses and threats to hu+an ri,hts and liberties.
0#
The concern is not unfounded,
but appropriate re+edies eEist within our statutes, and so resort to the constitutional tru+p card is
not necessar". Even if we were to en,a,e the pre+ise, the proper Duristic eEercise should be to
eEa+ine whether an e+plo"er has taken the attributes of the (tate so that it could be co+pelled b"
the Constitution to observe the proscriptions of the Bill of Ri,hts. But the strained analo," si+pl"
does not sBuare since the attributes of an e+plo"er are starkl" incon,ruous with those of the (tate.
E+plo"ers plainl" do not possess the aweso+e powers and the tre+endous resources which the
(tate has at its co++and.
The differences between the (tate and e+plo"ers are not +erel" literal, but eEtend to their ver"
essences. =nlike the (tate, the raison d6etre of e+plo"ers in business is to accu+ulate profits.
Perhaps the (tate and the e+plo"er are si+ilarl" capacitated to inflict inDur" or disco+fort on
persons under their control, but the sa+e power is also possessed b" a school principal, hospital
ad+inistrator, or a reli,ious leader, a+on, +an" others. 2ndeed, the scope and reach of authorit" of
an e+plo"er pales in co+parison with that of the (tate. There is no basis to conclude that an
e+plo"er, or even the e+plo"er class, +a" be dee+ed a de facto state and on that pre+ise,
co+pelled to observe the Bill of Ri,hts. There is si+pl" no neEus in their functions, distaff as the"
are, that renders it necessar" to accord the sa+e Durisprudential treat+ent.
2t +a" be so, as alluded in the dissent of !ustice Puno, that a conservative court s"ste+ overl"
solicitous to the concerns of business +a" consciousl" ,ut awa" at ri,hts or privile,es owin, to the
labor sector. This certainl" happened before in the =nited (tates in the earl" part of the twentieth
centur", when the pro,ressive labor le,islation such as that enacted durin, President Roosevelt<s
New 6eal re,i+e L +ost of the+ addressin, proble+s of labor L were struck down b" an arch&
conservative Court.
0$
The preferred rationale then was to enshrine within the constitutional order
business prero,atives, renderin, the+ superior to the eEpress le,islative intent. Curiousl", followin,
its Dudicial philosoph" at the ti+e the =. (. (upre+e Court +ade due process ,uarantee towards
e+plo"ers prevail over the police power to defeat the cause of labor.
00
:f course, this Court should not be insensate to the +eans and +ethods b" which the entrenched
powerful class +a" +aneuver the socio&political s"ste+ to ensure self&preservation. 1owever, the
re+ed" to ri,htward Dudicial bias is not leftward Dudicial bias. The +ore proper Dudicial attitude is to
,ive due respect to le,islative prero,atives, re,ardless of the ideolo,ical sauce the" are dipped in.
9hile the Bill of Ri,hts +aintains a position of pri+ac" in the constitutional hierarch",
0;
it has scope
and li+itations that +ust be respected and asserted b" the Court, even thou,h the" +a" at ti+es
serve so+ewhat bitter ends. The dissentin, opinions are palpabl" distressed at the effect of
the +ecision, which will undoubtedl" provoke those refleEivel" s"+pathetic to the labor class. But
haphaCard le,al theor" cannot be used to Dustif" the obverse result. The adoption of the dissentin,
views would ,ive rise to all sorts of absurd constitutional clai+s. An eEco++unicated Catholic +i,ht
de+and hisAher reinstate+ent into the ,ood ,races of the Church and into co++union on the
,round that eEco++unication was violative of the constitutional ri,ht to due process. A celebrit"
contracted to endorse Pepsi Cola +i,ht sue in court to void a stipulation that prevents hi+Aher fro+
sin,in, the praises of Coca Cola once in a while, on the ,round that such stipulation violates the
constitutional ri,ht to free speech. An e+plo"ee +i,ht sue to prevent the e+plo"er fro+ readin,
out,oin, e&+ail sent throu,h the co+pan" server usin, the co+pan" e&+ail address, on the ,round
that the constitutional ri,ht to privac" of co++unication would be breached.
The above concerns do not in an"wa" serve to trivialiCe the interests of labor. But we +ust avoid
overarchin, declarations in order to Dustif" an end result beneficial to labor. 2 dread the doctrinal
acceptance of the notion that the Bill of Ri,hts, on its own, affords protection and sanctuar" not Dust
fro+ the acts of (tate but also fro+ the conduct of private persons. Natural and Duridical persons
would hesitate to interact for fear that a +isstep could lead to their bein, char,ed in court as a
constitutional violator. Private institutions that thrive on their eEclusivit", such as churches or cliBuish
,roups, could be forced to rene,e on their traditional tenets, includin, vows of secrec" and the like, if
dee+ed b" the Court as inconsistent with the Bill of Ri,hts. 2ndeed, that funda+ental ri,ht of all
private persons to be let alone would be forever di+inished because of a Buestionable notion that
contravenes with centuries of political thou,ht.
2t is not difficult to be enraptured b" novel le,al ideas. Their characteriCation is susceptible to the
sa+e +arketin, traps that hook consu+ers to new products. 9ith the help of uniBue wrappin,, a
catch" label, and testi+onials fro+ professed eEperts fro+ eEotic lands, a +alodorous idea +a" ,ain
wide acceptance, even a+on, those self&possessed with their own hei,htened senses of
perception. >et before we Doin the +ad rush in order to proclai+ a theor" as Hbrilliant,H a ri,orous test
+ust first be e+plo"ed to deter+ine whether it co+ple+ents or contradicts our own s"ste+ of laws
and Duristic thou,ht. 9ithout such anal"sis, we run the risk of abne,atin, the doctrines we have
fostered for decades and the protections the" +a" have i+planted into our wa" of life.
(hould the Court adopt the view that the Bill of Ri,hts +a" be invoked to invalidate actions b"
private entities a,ainst private individuals, the Court would open the flood,ates to, and the docket
would be swa+ped with, liti,ations of the scurrilous sort. !ust as patriotis+ is the last refu,e of
scoundrels, the broad constitutional clai+ is the final resort of the desperate liti,ant.
Constitutional -rotection of Labor
The provisions of the 47* Constitution affir+ the pri+ac" of labor and advocate a +ulti&faceted
state polic" that affords, a+on, others, full protection to labor. (ection 7, Article 22 thereof provides8
The (tate affir+s labor as a pri+ar" social econo+ic force. 2t shall protect the ri,hts of
workers and pro+ote their welfare.
5urther, (ection $, Article ?222 states8
The (tate shall afford full protection to labor, local and overseas, or,aniCed and unor,aniCed,
and pro+ote full e+plo"+ent and eBual e+plo"+ent opportunities for all.
2t shall ,uarantee the ri,hts of all workers to self&or,aniCation, collective bar,ainin, and
ne,otiations, and peaceful concerted activities, includin, the ri,ht to strike in accordance
with law. The" shall be entitled to securit" to tenure, hu+ane conditions of work, and a livin,
wa,e. The" shall also participate in polic" and decision&+akin, processes affectin, their
ri,hts and benefits as +a" be provided b" law.
The (tate shall pro+ote the principle of shared responsibilit" between workers and
e+plo"ers and the preferential use of voluntar" +odes in settlin, disputes, includin,
conciliation, and shall enforce their +utual co+pliance therewith to foster industrial peace.
The (tate shall re,ulate the relations between workers and e+plo"ers, reco,niCin, the ri,ht
of labor to its Dust share in the fruits of production and the ri,ht of enterprises to reasonable
returns on invest+ents, and to eEpansion and ,rowth.
The constitutional enshrine+ent of the ,uarantee of full protection of labor is not novel to the 47*
Constitution. (ection ), Article ?23 of the 4$; Constitution reads8
The (tate shall afford protection to labor, especiall" to workin, wo+en, and +inors, and shall
re,ulate the relations between the landowner and tenant, and between labor and capital in
industr" and in a,riculture. The (tate +a" provide for co+pulsor" arbitration.
(i+ilarl", a+on, the principles and state policies declared in the 4*$ Constitution, is that provided
in (ection 4, Article 22 thereof8
The (tate shall afford full protection to labor, pro+ote full e+plo"+ent and eBualit" in
e+plo"+ent, ensure eBual work opportunities re,ardless of seE, race or creed, and re,ulate
the relations between workers and e+plo"ers. The (tate shall assure the ri,hts of workers to
self&or,aniCation, collective bar,ainin,, securit" of tenure, and Dust and hu+ane conditions of
work. The (tate +a" provide for co+pulsor" arbitration.
:n the other hand, prior to the 4*$ Constitution, the ri,ht to securit" of tenure could onl" be found
in le,islative enact+ents and their respective i+ple+entin, rules and re,ulations. 2t was onl" in the
4*$ Constitution that securit" of tenure was elevated as a constitutional ri,ht. The develop+ent of
the concept of securit" of tenure as a constitutionall" reco,niCed ri,ht was discussed b" this Court
in 4-I Credit Corporation v. #LRC)
0)
to wit8
The enthrone+ent of the worker<s ri,ht to securit" or tenure in our funda+ental law was not
achieved overni,ht. 5or all its liberalit" towards labor, our 4$; Constitution did not elevate
the ri,ht as a constitutional ri,ht. 5or a lon, ti+e, the worker<s securit" of tenure had onl" the
protective +antle of statutes and their interpretative rules and re,ulations. 2t was as
uncertain protection that so+eti+es "ielded to the political per+utations of the ti+es. 2t took
labor nearl" four decades of sweat and tears to persuade our people thru their leaders, to
eEalt the worker<s ri,ht to securit" of tenure as a sacrosanct constitutional ri,ht. 2t was Article
22, section # M4N of our 4*$ Constitution that declared as a polic" that the (tate shall assure
the ri,ht of worker<s to securit" tenure. The 47* Constitution is even +ore solicitous of the
welfare of labor. (ection $ of its Article ?222 +andates that the (tate shall afford full protection
to labor and declares that all workers shall be entitled to securit" of tenure. A+on, the
enunciated (tate policies are the
pro+otion of social Dustice and a Dust and d"na+ic social order. 2n contrast, the prero,ative of
+ana,e+ent to dis+iss a worker, as an aspect of propert" ri,ht, has never been endowed
with a constitutional status.
The uneBuivocal constitutional declaration that all workers shall be entitled to securit" of
tenure spurred our law+akers to stren,then the protective walls around this hard earned
ri,ht. The ri,ht was protected fro+ undue infrin,e+ent both b" our substantive and
procedural laws. Thus, the causes for dis+issin, e+plo"ees were +ore defined and
restrictedF on the other hand, the procedure of ter+ination was also +ore clearl" delineated.
These substantive and procedural laws +ust be strictl" co+plied with before a worker can
be dis+issed fro+ his e+plo"+ent.
0*
2t is Buite apparent that the constitutional protection of labor was entrenched +ore than ei,ht
decades a,o, "et such did not prevent this Court in the past fro+ affir+in, dis+issals for Dust cause
without valid notice. Nor was there an" pretense +ade that this constitutional +aEi+ afforded a
laborer a positive ri,ht a,ainst dis+issal for Dust cause on the ,round of lack of valid prior notice. As
de+onstrated earlier, it was onl" after the enact+ent of the -abor Code that the doctrine relied upon
b" the dissentin, opinions beca+e en vogue. This point hi,hli,hts +" position that the violation of
the notice reBuire+ent has statutor" +oorin,s, not constitutional.
2t should be also noted that the 47* Constitution also reco,niCes the principle of shared
responsibilit" between workers and e+plo"ers, and the ri,ht of enterprise to reasonable returns,
eEpansion, and ,rowth. 9hatever perceived i+balance there +i,ht have been under previous
incarnations of the provision have been obviated b" (ection $, Article ?222.
2n the case of 'anila -rince 3otel v. (SIS,
07
we affir+ed the presu+ption that all constitutional
provisions are self&eEecutin,. 9e reasoned that to declare otherwise would result in the pernicious
situation wherein b" +ere inaction and disre,ard b" the le,islature, constitutional +andates would
be rendered ineffectual. Thus, we held8
As a,ainst constitutions of the past, +odern constitutions have been ,enerall" ed upon a
different principle and have often beco+e in effect eEtensive codes of laws intended to
operate directl" upon the people in a +anner si+ilar to that of statutor" enact+ents, and the
function of constitutional conventions has evolved into one +ore like that of a le,islative
bod". 1ence, unless it is eEpressl" provided that a le,islative act is necessar" to enforce a
constitutional +andate, the presu+ption now is that all provisions of the constitution are self&
eEecutin,. 2f the constitutional provisions are treated as reBuirin, le,islation instead of self&
eEecutin,, the le,islature would have the power to i,nore and practicall" nullif" the +andate
of the funda+ental law. This can be catacl"s+ic. That is wh" the prevailin, view is, as it has
alwa"s been, that L
. . . in case of doubt, the Constitution should be considered self&eEecutin, rather than
non&self&eEecutin,. . . . =nless the contrar" is clearl" intended, the provisions of the
Constitution should be considered self&eEecutin,, as a contrar" rule would ,ive the
le,islature discretion to deter+ine when, or whether, the" shall be effective. These
provisions would be subordinated to the will of the law+akin, bod", which could
+ake the+ entirel" +eanin,less b" si+pl" refusin, to pass the needed i+ple+entin,
statute.
04
2n further discussin, self&eEecutin, provisions, this Court stated that8
2n self&eEecutin, constitutional provisions, the le,islature +a" still enact le,islation to
facilitate the eEercise of powers directl" ,ranted b" the constitution, further the operation of
such a provision, prescribe a practice to be used for its enforce+ent, provide a convenient
re+ed" for the protection of the ri,hts secured or the deter+ination thereof, or place
reasonable safe,uards around the eEercise of the ri,ht. The +ere fact that le,islation +a"
supple+ent and add to or prescribe a penalt" for the violation of a self&eEecutin,
constitutional provision does not render such a provision ineffective in the absence of such
le,islation. The o+ission fro+ a constitution of an" eEpress provision for a re+ed" for
enforcin, a ri,ht or liabilit" is not necessaril" an indication that it was not intended to be self&
eEecutin,. The rule is that a self&eEecutin, provision of the constitution does not necessaril"
eEhaust le,islative power on the subDect, but an" le,islation +ust be in har+on" with the
constitution, further the eEercise of constitutional ri,ht and +ake it +ore available.
(ubseBuent le,islation however does not necessaril" +ean that the subDect constitutional
provision is not, b" itself, full" enforceable.
;%
Thus, the constitutional +andates of protection to labor and securit" of tenure +a" be dee+ed as
self&eEecutin, in the sense that these are auto+aticall" acknowled,ed and observed without need
for an" enablin, le,islation. 1owever, to declare that the constitutional provisions are enou,h to
,uarantee the full eEercise of the ri,hts e+bodied therein, and the realiCation of ideals therein
eEpressed, would be i+practical, if not unrealistic. The espousal of such view presents the
dan,erous tendenc" of bein, overbroad and eEa,,erated. The ,uarantees of Hfull protection to
laborH and Hsecurit" of tenureH, when eEa+ined in isolation, are faciall" unBualified, and the broadest
interpretation possible su,,ests a blanket shield in favor of labor a,ainst an" for+ of re+oval
re,ardless of circu+stance. This interpretation i+plies an uni+peachable ri,ht to continued
e+plo"+ent&a utopian notion, doubtless&but still hardl" within the conte+plation of the fra+ers.
(ubseBuent le,islation is still needed to define the para+eters of these ,uaranteed ri,hts to ensure
the protection and pro+otion, not onl" the ri,hts of the labor sector, but of the e+plo"ers< as well.
9ithout specific and pertinent le,islation, Dudicial bodies will be at a loss, for+ulatin, their own
conclusion to approEi+ate at least the ai+s of the Constitution.
=lti+atel", therefore, (ection $ of Article ?222 cannot, on its own, be a source of a positive
enforceable ri,ht to stave off the dis+issal of an e+plo"ee for Dust cause owin, to the failure to serve
proper notice or hearin,. As +anifested b" several fra+ers of the 47* Constitution, the provisions
on social Dustice reBuire le,islative enact+ents for their enforceabilit". This is reflected in the record
of debates on the social Dustice provisions of the Constitution8
M(. M5E-2C2TA( (.N AQ=2N:8 9e appreciate the concern of the Co++issioner. But this
Co++ittee Mon (ocial !usticeN has actuall" beco+e 36e :or4m #7re#%> o: # 7o3 o: 52e<1:1<
8r1ev#$<e5 #$% 52e<1:1< %em#$%5, 54<6 36#3 4$%er53#$%#b7>, Ae m#> 6#ve bee$, #3
o$e 31me or #$o36er, %#$8ero457> 3re#%1$8 1$3o 36e :4$<31o$5 o: 7e8157#31o$. :ur onl"
plea to the Co++ission is to focus our perspective on the +atter of social Dustice and its
ri,htful place in the Constitution. /6#3 Ae e$v151o$ 6ere 15 # m#$%#3e 52e<1:1< e$o486
36#3 Ao47% 81ve 1m2e345 :or 53#343or> 1m27eme$3#31o$. /e Ao47% <#431o$ o4r5e7ve5 1$
3erm5 o: 36e ;4%1<1o45 eBer<15e o: 5e7:-<e$5or5612 #8#1$53 3re#%1$8 1$3o 36e :4$<31o$5
o: 7e8157#31o$. .e+phasis supplied/
;
EEE
M5-:RENR 6.N RE'A-A6:8 2 notice that the 4$; Constitution had onl" one section on
social DusticeF the sa+e is true with the 4*$ Constitution. But the" see+ to have stood us in
,ood steadF and ' #m # 71337e 54r2r15e% A6>, %e5213e 36#3 #33em23 #3 5e7:-<e$5or5612,
36ere #re <er3#1$ 2rov151o$5 6ere A61<6 #re 2ro2er7> :or 7e8157#31o$.
;#
EEE
B2(1:P MTE:6:R: (.N BACAN28 M2N think the distinction that was ,iven durin, the
presentation of the provisions on the Bill of Ri,hts b" Co++issioner Bernas is ver" apropos
here. +e 52oCe o: 5e7:-eBe<431$8 r18635 A61<6 be7o$8 2ro2er7> 3o 36e "177 o: R18635, #$%
36e$ 6e 52oCe o: # $eA bo%> o: r18635 A61<6 #re more o: <7#1m5 #$% 36#3 36e5e 6#ve
<ome #bo43 7#r8e7> 36ro486 36e AorC5 o: 5o<1#7 2617o5o26er5 #$% 36e$ 36e 3e#<61$8 o:
36e Po2e5. T6e> :o<45 o$ 36e <ommo$ 8oo% #$% 6e$<e, 13 15 $o3 #5 e#5> 3o 21$2o1$3
2re<15e7> 36e5e r18635 $or 36e 51345 o: 36e r18635. And "et, the" eEist in relation to the
co++on ,ood.
;$
EEE
M(. MM2N6A -=R M.N Q=E(A6A8 ' 361$C 36e $133>-8r133> o: 3615 C1$% o: <o77#bor#31o$ A177
be 7e:3 3o 7e8157#31o$ but the i+portant thin, now is the conservation, utiliCation or
+aEi+iCation of the ver" li+ited resources. EEE
MR2CAR6: !.N R:M=-:8 The other proble+ is that, b" and lar,e, ,overn+ent services are
inefficient. (o, this is a proble+ all b" itself. :n (ection 4, where the report sa"s that
people<s or,aniCations as a principal +eans of e+powerin, the people to pursue and protect
throu,h peaceful +eansI, ' %o $o3 5422o5e 36#3 36e Comm133ee Ao47% 71Ce 3o e136er
2reem23 or eB<74%e 36e 7e8157#34re, be<#45e 36e <o$<e23 o: # re2re5e$3#31ve #$%
%emo<r#31< 5>53em re#77> 15 36#3 36e 7e8157#34re 15 $orm#77> 36e 2r1$<12#7 me#$5.
ME6M=N6: '.N 'ARC2A8 T6#3 15 <orre<3. '$ :#<3, 2eo27e <#$$o3 eve$ %re#m o:
1$:74e$<1$8 36e <om2o5131o$ or 36e member5612 o: 36e 7e8157#34re, 1: 36e> %o $o3 8e3
or8#$1De%. 2t is, in fact, a reco,nition of the principle that unless a citiCenr" is or,aniCed and
+obiliCed to pursue its ends peacefull", then it cannot reall" participate effectivel".
;0
There is no pretense on the part of the fra+ers that the provisions on (ocial !ustice, particularl"
(ection $ of Article ?222, are self&eEecutor". (till, considerin, the rule that provisions should be
dee+ed self&eEecutin, if enforceable without further le,islative action, an eEa+ination of (ection $
of Article ?222 is warranted to deter+ine whether it is co+plete in itself as a definitive law, or if it
needs future le,islation for co+pletion and enforce+ent.
;;
Particularl", we should inBuire whether or
not the provision voids the dis+issal of a laborer for Dust cause if no valid notice or hearin, is
attendant.
Constitutional Co++issioner 5r. !oaBuin '. Bernas +akes a si,nificant co++ent on (ection $,
Article ?222 of the 47* Constitution8
The MclusterN of ri,hts ,uaranteed in the second para,raph are the ri,ht Hto securit" of tenure,
hu+ane conditions of work, and a livin, wa,e.H A,ain, althou,h these have been set apart
b" a period ../ fro+ the neEt sentence and are therefore not +odified b" the final phrase Has
+a" be provided b" law,H 13 15 $o3 36e 1$3e$31o$ 3o 27#<e 36e5e be>o$% 36e re#<6 o: v#71%
7#A5. EEE .e+phasis supplied/
;)
At present, the -abor Code is the pri+ar" +echanis+ to carr" out the Constitution<s directives. This
is clear fro+ Article $
;*
under Chapter thereof which essentiall" restates the polic" on the
protection of labor as worded in the 4*$ Constitution, which was in force at the ti+e of enact+ent of
the -abor Code. 2t cr"stalliCes the funda+ental law<s policies on labor, defines the para+eters of the
ri,hts ,ranted to labor such as the ri,ht to securit" of tenure, and prescribes the standards for the
enforce+ent of such ri,hts in concrete ter+s. 9hile not infallible, the +easures provided therein
tend to ensure the achieve+ent of the constitutional ai+s.
The necessit" for laws concretiCin, the constitutional principles on the protection of labor is evident
in the reliance placed upon such laws b" the Court in resolvin, the issue of the validit" of a worker<s
dis+issal. 2n cases where that was the issue confrontin, the Court, it consistentl" reco,niCed the
constitutional ri,ht to securit" of tenure and e+plo"ed the standards laid down b" prevailin, laws in
deter+inin, whether such ri,ht was violated.
;7
The Court<s reference to laws other than the
Constitution in resolvin, the issue of dis+issal is an i+plicit acknowled,+ent that the ri,ht to
securit" of tenure, while reco,niCed in the Constitution, cannot be i+ple+ented unifor+l" absent a
law prescribin, concrete standards for its enforce+ent.
As discussed earlier, the validit" of an e+plo"ee<s dis+issal in previous cases was eEa+ined b" the
Court in accordance with the standards laid down b" Con,ress in the Ter+ination Pa" -aw, and
subseBuentl", the -abor Code and the a+end+ents thereto. At present, the validit" of an e+plo"ee<s
dis+issal is wei,hed a,ainst the standards laid down in Article #*4, as well as Article #7# in relation
to Article #**.b/ of the -abor Code, for a dis+issal for Dust cause, and Article #7$ for a dis+issal for
an authoriCed cause.
0he 7ffect of Statutory *iolation
Of #otice and 3earing
There is no doubt that the dis+issal of an e+plo"ee even for Dust cause, without prior notice or
hearin,, violates the -abor Code. 1owever, does such violation necessaril" void the dis+issalP
Before 2 proceed with +" discussion on dis+issals for Dust causes, a brief co++ent re,ardin,
dis+issals for authoriCed cause under Article #7$ of the -abor Code. 9hile the Dusticiable Buestion
in Serrano pertained to a dis+issal for unauthoriCed cause, the rulin, therein was crafted as
definitive to dis+issals for Dust cause. 1appil", the +ecision toda" does not adopt the sa+e unwise
tack. 2t should be reco,niCed that dis+issals for Dust cause and dis+issals for authoriCed cause are
,overned b" different provisions, entail diver,ent reBuisites, and ani+ated b" distinct rationales. The
lan,ua,e of Article #7$ eEpressl" effects the ter+ination for authoriCed cause to the service of
written notice on the workers and the Ministr" of -abor at least one ./ +onth before the intended
date of ter+ination. This constitutes an e+inent difference than dis+issals for Dust cause, wherein
the causal relation between the notice and the dis+issal is not eEpressl" stipulated. The
circu+stances distin,uishin, Dust and authoriCed causes are too +arkedl" different to be subDected
to the sa+e rules and reasonin, in interpretation.
(ince the present petition is li+ited to a Buestion arisin, fro+ a dis+issal for Dust cause, there is no
reason for +akin, an" pronounce+ent re,ardin, authoriCed causes. (uch declaration would be
+erel" obiter) since the" are neither the law of the case nor dispositive of the present petition. 9hen
the Buestion beco+es Dusticiable before this Court, we will be confronted with an appropriate factual
+ilieu on which we can render a +ore Dudicious disposition of this ad+ittedl" i+portant Buestion.
4. +ismissal for ,ust Cause
There is no eEpress provision in the -abor Code that voids a dis+issal for Dust cause on the ,round
that there was no notice or hearin,. =nder (ection #*4, the e+plo"er is precluded fro+ dis+issin,
an e+plo"ee eEcept for a Dust cause as provided in (ection #7#, or an authoriCed cause under
(ections #7$ and #70. Based on readin, (ection #*4 alone, the eEistence of Dust cause b" itself is
sufficient to validate the ter+ination.
!ust cause is defined b" Article #7#, which unlike Article #7$, does not condition the ter+ination on
the service of written notices. (till, the dissentin, opinions propound that even if there is Dust cause,
a ter+ination +a" be invalidated due to the absence of notice or hearin,. This view is anchored
+ainl" on constitutional +oorin,s, the basis of which 2 had ar,ued a,ainst earlier. 5or deter+ination
now is whether there is statutor" basis under the -abor Code to void a dis+issal for Dust cause due
to the absence of notice or hearin,.
As pointed out b" !ustice MendoCa in Serrano, it was onl" in 474 that the -abor Code was
a+ended to enshrine into statute the twin reBuire+ents of notice and hearin,.
;4
(uch reBuire+ents
are found in Article #** of the -abor Code, under the headin, HMiscellaneous Provisions.H Prior to
the a+end+ent, the notice&hearin, reBuire+ent was found under the i+ple+entin, rules issued b"
the then Minister of -abor in 47. The present&da" i+ple+entin, rules likewise +andate that the
standards of due process, includin, the reBuire+ent of written notice and hearin,, Hbe substantiall"
observed.H
)%
2ndubitabl", the failure to substantiall" co+pl" with the standards of due process, includin, the notice
and hearin, reBuire+ent, +a" ,ive rise to an actionable clai+ a,ainst the e+plo"er. =nder Article
#77, penalties +a" arise fro+ violations of an" provision of the -abor Code. The (ecretar" of -abor
likewise enDo"s broad powers to inBuire into eEistin, relations between e+plo"ers and e+plo"ees.
("ste+atic violations b" +ana,e+ent of the statutor" ri,ht to due process would fall under the broad
,rant of power to the (ecretar" of -abor to investi,ate under Article #*$.
1owever, the re+ed" of reinstate+ent despite ter+ination for Dust cause is si+pl" not authoriCed b"
the -abor Code. Neither the -abor Code nor its i+ple+entin, rules states that a ter+ination for Dust
cause is voided because the reBuire+ent of notice and hearin, was not observed. This is not si+pl"
an inadvertent se+antic failure, but a conscious effort to protect the prero,atives of the e+plo"er to
dis+iss an e+plo"ee for Dust cause. Notabl", despite the several pronounce+ents b" this Court in
the past eBuatin, the notice&hearin, reBuire+ent in labor cases to a constitutional +aEi+, neither
the le,islature nor the eEecutive has adopted the sa+e tack, even ,uttin, the protection to provide
that substantial co+pliance with due process suffices.
The -abor Code si,nificantl" eroded +ana,e+ent prero,atives in the hirin, and firin, of e+plo"ees.
9hereas e+plo"ees could be dis+issed even without Dust cause under the Ter+ination Pa" -aw
)
,
the -abor Code affords workers broad securit" of tenure. (till, the law reco,niCes the ri,ht of the
e+plo"er to ter+inate for Dust cause. The Dust causes enu+erated under the -abor Code S serious
+isconduct or willful disobedience, ,ross and habitual ne,lect, fraud or willful breach of trust,
co++ission of a cri+e b" the e+plo"ee a,ainst the e+plo"er, and other analo,ous causes S are
characteriCed b" the har+ful behavior of an e+plo"ee a,ainst the business or the person of the
e+plo"er.
These Dust causes for ter+ination are not ne,ated b" the absence of notice or hearin,. An e+plo"ee
who tries to kill the e+plo"er cannot be +a,icall" absolved of trespasses Dust because the e+plo"er
for,ot to serve due notice. :r a less eEtre+e eEa+ple, the ,ross and habitual ne,lect of an
e+plo"ee will not be i+proved upon Dust because the e+plo"er failed to conduct a hearin, prior to
ter+ination.
2n fact, the practical purpose of reBuirin, notice and hearin, is to afford the e+plo"ee the opportunit"
to dispute the contention that there was Dust cause in the dis+issal. >et it +ust be understood G 1: #
%15m155e% em27o>ee 15 %e2r1ve% o: 36e r1863 3o $o31<e #$% 6e#r1$8, #$% 3645 %e$1e% 36e
o22or34$13> 3o 2re5e$3 <o4$3erv#171$8 ev1%e$<e 36#3 %15243e5 36e :1$%1$8 o: ;453 <#45e,
re1$53#3eme$3 A177 be v#71% $o3 be<#45e 36e $o31<e #$% 6e#r1$8 re?41reme$3 A#5 $o3
ob5erve%, b43 be<#45e 36ere A#5 $o ;453 <#45e 1$ 36e %15m155#7. The opportunit" to dispute the
findin, of the Dust cause is readil" available before the -abor Arbiter, and the subseBuent levels of
appellate review. A,ain, as held in Serrano8
Even in cases of dis+issal under Art. #7#, the purpose for the reBuire+ent of notice and hearin, is
not to co+pl" with the 6ue Process Clause of the Constitution. The ti+e for notice and hearin, is at
the trial sta,e. Then that is the ti+e we speak of notice and hearin, as the essence of procedural
due process. Thus, co+pliance b" the e+plo"er with the notice reBuire+ent before he dis+isses an
e+plo"ee does not foreclose the ri,ht of the latter to Buestion the le,alit" of his dis+issal. As Art.
#**.b/ provides, HAn" decision taken b" the e+plo"er shall be without preDudice to the ri,ht of the
worker to contest the validit" or le,alit" of his dis+issal b" filin, a co+plaint with the re,ional branch
of the National -abor Relations Co++ission.
)#
The -abor Code presents no teEtuall" de+onstrable co++it+ent to invalidate a dis+issal for Dust
cause due to the absence of notice or hearin,. This is not surprisin,, as such re+ed" will not restore
the e+plo"er or e+plo"ee into eBuit". Absent a showin, of inte,ral causation, the +utual infliction of
wron,s does not ne,ate either inDur", but instead enforces two independent ri,hts of relief.
0he +amages6 +imensions
/ward for +amages 'ust 3ave Statutory 4asis
The Court has ,rappled with the proble+ of what should be the proper re+edial relief of an
e+plo"ee dis+issed with Dust cause, but not afforded either notice or hearin,. 2n a lon, line of cases,
be,innin, with $enphil Corp. v. #LRC
)$
and up until Serrano in #%%%, the Court had dee+ed an
inde+nification award as sufficient to answer for the violation b" the e+plo"er a,ainst the e+plo"ee.
1owever, the doctrine was +odified in Serrano.
2 disa,ree with Serrano insofar as it held that e+plo"ees ter+inated for Dust cause are to be paid
backwa,es fro+ the ti+e e+plo"+ent was ter+inated Huntil it is deter+ined that the ter+ination is
for Dust cause because the failure to hear hi+ before he is dis+issed renders the ter+ination of his
e+plo"+ent without le,al effect.H
)0
Article #*4 of the -abor Code clearl" authoriCes the pa"+ent of
backwa,es onl" if an e+plo"ee is unDustl" dis+issed. A dis+issal for Dust cause is obviousl"
antithetical to an unDust dis+issal. An award for backwa,es is not clearl" warranted b" the law.
0he Impropriety of /ward for Separation -ay
The for+ula of one +onth<s pa" for ever" "ear served does have statutor" basis. 2t is found thou,h
in the -abor Code thou,h, not the Civil Code. Even then, such co+putation is +ade for separation
pa" under the -abor Code. But separation pa" is not an appropriate as a re+ed" in this case, or in
an" case wherein an e+plo"ee is ter+inated for Dust cause. As !ustice 3itu, noted in his separate
opinion in Serrano) an e+plo"ee whose e+plo"+ent is ter+inated for a Dust cause is not entitled to
the pa"+ent of separation benefits.
);
(eparation pa" is traditionall" a +onetar" award paid as an
alternative to reinstate+ent which can no lon,er be effected in view of the lon, passa,e of ti+e or
because of the realities of the situation.
))
1owever, under (ection *, Rule , Book 32 of the :+nibus
Rules 2+ple+entin, the -abor Code, HMtNhe separation fro+ work of an e+plo"ee for a Dust cause
does not entitle hi+ to the ter+ination pa" provided in the Code.H
)*
Neither does the -abor Code
itself provide instances wherein separation pa" is warranted for dis+issals with Dust cause.
(eparation pa" is warranted onl" for dis+issals for authoriCed causes, as enu+erated in Article #7$
and #70 of the -abor Code.
0he Impropriety of 7!uity /wards
Ad+ittedl", the Court has in the past authoriCed the award of separation pa" for dul" ter+inated
e+plo"ees as a +easure of social Dustice, provided that the e+plo"ee is not ,uilt" of serious
+isconduct reflectin, on +oral character.
)7
This doctrine is inapplicable in this case, as the A,abons
are ,uilt" of abandon+ent, which is the deliberate and unDustified refusal of an e+plo"ee to resu+e
his e+plo"+ent. Abandon+ent is tanta+ount to serious +isconduct, as it constitutes a willful breach
of the e+plo"er&e+plo"ee relationship without cause.
The award of separation pa" as a +easure of social Dustice has no statutor" basis, but clearl"
e+anates fro+ the Court<s so&called HeBuit" Durisdiction.H The Court<s eBuit" Durisdiction as a basis for
award, no +atter what for+ it +a" take, is likewise unwarranted in this case. Eas" resort to eBuit"
should be avoided, as it should "ield to positive rules which pre&e+pt and prevail over such
persuasions.
)4
Abstract as the concept is, it does not ad+it to definite and obDective standards.
2 consider the pronounce+ent re,ardin, the proper +onetar" awards in such cases as $enphil
Corp. v. #LRC,
*%
Reta,
*
and to a de,ree, even Serrano as pre+ised in part on eBuit". This decision is
pre+ised in part due to the absence of cited statutor" basis for these awards. 2n these cases, the
Court dee+ed an inde+nit" award proper without eEactl" sa"in, where in statute could such award
be derived at. Perhaps, eBuit" or social Dustice can be invoked as basis for the award. 1owever, this
sort of arbitrariness, indeter+inac" and Dudicial usurpation of le,islative prero,atives is precisel" the
source of +" discontent. (ocial Dustice should be the aspiration of all that we do, "et 2 think it the
+ore +ature attitude to consider that it ebbs and flows within our statutes, rather than view it as an
independent source of fundin,.
/rticle 899 of the Labor Code as a Source of Liability
Another putative source of liabilit" for failure to render the notice reBuire+ent is Article #77 of the
-abor Code, which states8
Article #77 states8
Penalties. L EEcept as otherwise provided in this Code, or unless the acts co+plained of
hin,es on a Buestion of interpretation or i+ple+entation of a+bi,uous provisions of an
eEistin, collective bar,ainin, a,ree+ent, an" violation of the provisions of this Code
declared to be unlawful or penal in nature shall be punished with a fine of not less than :ne
Thousand Pesos .P,%%%.%%/ nor +ore than Ten Thousand Pesos .P%,%%%.%%/, or
i+prison+ent of not less than three +onths nor +ore than three "ears, or both such fine and
i+prison+ent at the discretion of the court.
2t is apparent fro+ the provision that the penalt" arises due to contraventions of the provisions of the
-abor Code. 2t is also clear that the provision co+es into pla" re,ardless of who the violator +a" be.
Either the e+plo"er or the e+plo"ee +a" be penaliCed, or perhaps even officials tasked with
i+ple+entin, the -abor Code.
1owever, it is apparent that Article #77 is a penal provisionF hence, the prescription for penalties
such as fine and i+prison+ent. The Article is also eEplicit that the i+position of fine or i+prison+ent
is at the Hdiscretion of the court.H Thus, the proceedin,s under the provision is penal in character.
The cri+inal case has to be instituted before the proper courts, and the -abor Code violation subDect
thereof dul" proven in an adversarial proceedin,. 1ence, Article #77 cannot appl" in this case and
serve as basis to i+pose a penalt" on Riviera 1o+es.
2 also +aintain that under Article #77 the penalt" should be paid to the (tate, and not to the person
or persons who +a" have suffered inDur" as a result of the violation. A penalt" is a su+ of +one"
which the law reBuires to be paid b" wa" of punish+ent for doin, so+e act which is prohibited or for
not doin, so+e act which is reBuired to be done.
*#
A penalt" should be distin,uished fro+ da+a,es
which is the pecuniar" co+pensation or inde+nit" to a person who has suffered loss, detri+ent, or
inDur", whether to his person, propert", or ri,hts, on account of the unlawful act or o+ission or
ne,li,ence of another. Article #77 clearl" serves as a punitive fine, rather than a co+pensator"
+easure, since the provision penaliCes an act that violates the -abor Code even if such act does not
cause actual inDur" to an" private person.
2ndependent of the e+plo"ee<s interests protected b" the -abor Code is the interest of the (tate in
seein, to it that its re,ulator" laws are co+plied with. Article #77 is intended to satiate the latter
interest. Nothin, in the lan,ua,e of Article #77 indicates an intention to co+pensate or re+unerate a
private person for inDur" he +a" have sustained.
2t should be noted thou,h that in Serrano, the Court observed that since the pro+ul,ation of $enphil
Corp. v. #LRC
*$
in 474, Hfines i+posed for violations of the notice reBuire+ent have varied
fro+ P,%%%.%% to P#,%%%.%% to P;,%%%.%% to P%,%%%.%%.H
*0
2nterestin,l", this ran,e is the sa+e
ran,e of the penalties i+posed b" Article #77. These HfinesH adverted to in Serrano were paid to the
dis+issed e+plo"ee. The use of the ter+ Hfines,H as well as the ter+inolo," e+plo"ed a few other
cases,
*;
+a" have left an erroneous i+pression that the award i+ple+ented be,innin,
with $enphil was based on Article #77 of the -abor Code. >et, an eEa+ination of $enphilreveals
that what the Court actuall" awarded to the e+plo"ee was an Hinde+nit"H, dependent on the facts of
each case and the ,ravit" of the o+ission co++itted b" the e+plo"er. There is no +ention
in $enphil of Article #77 of the -abor Code, or indeed, of an" statutor" basis for the award.
0he -roper 4asis 7mployer6s Liability under the Civil Code
As earlier stated, $enphil allowed the pa"+ent of inde+nit" to the e+plo"ee dis+issed for Dust
cause is dependent on the facts of each case and the ,ravit" of the o+ission co++itted b" the
e+plo"er. 1owever, 2 considered $enphil flawed insofar as it is silent as to the statutor" basis for the
inde+nit" award. This failure, to +" +ind, renders it unwise for to reinstate the $enphil rule, and
foster the i+pression that it is the Dudicial business to invent awards for da+a,es without clear
statutor" basis.
T6e 2ro2er 7e8#7 b#515 :or 6o7%1$8 36e em27o>er 71#b7e :or mo$e3#r> %#m#8e5 3o 36e em27o>ee
%15m155e% :or ;453 <#45e 15 36e C1v17 Co%e. T6e #A#r% o: %#m#8e5 56o47% be me#54re%
#8#1$53 36e 7o55 or 1$;4r> 54::ere% b> 36e em27o>ee b> re#5o$ o: 36e em27o>er95 v1o7#31o$ or,
1$ <#5e o: $om1$#7 %#m#8e5, 36e r1863 v1$%1<#3e% b> 36e #A#r%. T615 15 36e 2ro2er 2#r#%18m
#436or1De% b> o4r 7#A, #$% %e518$e% 3o ob3#1$ 36e :#1re53 2o551b7e re71e:.
=nder (ection #*.0/ of the -abor Code, the -abor Arbiter has Durisdiction over clai+s for actual,
+oral, eEe+plar" and other for+s of da+a,es arisin, fro+ the e+plo"er&e+plo"ee relations. 2t is
thus the dut" of -abor Arbiters to adDudicate clai+s for da+a,es, and the" should disabuse
the+selves of an" inhibitions if it does appear that an award for da+a,es is warranted. As triers of
facts in a specialiCed field, the" should attune the+selves to the particular conditions or proble+s
attendant to e+plo"er&e+plo"ee relationships, and thus be in the best possible position as to the
nature and a+ount of da+a,es that +a" be warranted in this case.
The da+a,es referred under (ection #*.0/ of the -abor Code are those available under the Civil
Code. 2t is but proper that the Civil Code serve as the basis for the inde+nit", it bein, the law that
re,ulates the private relations of the +e+bers of civil societ", deter+inin, their respective ri,hts and
obli,ations with reference to persons, thin,s, and civil acts.
*)
No +atter how i+pressed with the
public interest the relationship between a private e+plo"er and e+plo"ee is, it still is ulti+atel" a
relationship between private individuals. Notabl", even thou,h the -abor Code could ver" well have
provided set rules for da+a,es arisin, fro+ the e+plo"er&e+plo"ee relationship, referral was
instead +ade to the concept of da+a,es as enu+erated and defined under the Civil Code.
'iven the lon, controvers" that has do,,ed this present issue re,ardin, dis+issals for Dust cause, it
is wise to la" down standards that would ,uide the proper award of da+a,es under the Civil Code in
cases wherein the e+plo"er failed to co+pl" with statutor" due process in dis+issals for Dust cause.
2irst. 2 believe that it can be +aintained as a ,eneral rule, that failure to co+pl" with the statutor"
reBuire+ent of notice auto+aticall" ,ives rise to no+inal da+a,es, at the ver" least, even if the
dis+issal was sustained for Dust cause.
No+inal da+a,es are adDudicated in order that a ri,ht of a plaintiff which has been violated or
invaded b" another +a" be vindicated or reco,niCed without havin, to inde+nif" the plaintiff for an"
loss suffered b" hi+.
**
No+inal da+a,es +a" likewise be awarded in ever" obli,ation arisin, fro+
law, contracts, Buasi&contracts, acts or o+issions punished b" law, and Buasi&delicts, or where an"
propert" ri,ht has been invaded.
Clearl", the bare act of failin, to observe the notice reBuire+ent ,ives rise to no+inal da+a,es
assessable a,ainst the e+plo"er and due the e+plo"ee. The -abor Code indubitabl" entitles the
e+plo"ee to notice even if dis+issal is for Dust cause, even if there is no apparent intent to void such
dis+issals deficientl" i+ple+ented. 2t has also been held that one<s e+plo"+ent, profession, trade,
or callin, is a Hpropert" ri,htH and the wron,ful interference therewith ,ives rise to an actionable
wron,.
*7
2n 4etter 4uildings) Inc. v. #LRC,
*4
the Court ruled that the while the ter+ination therein was for Dust
and valid cause, the +anner of ter+ination was done in co+plete disre,ard of the necessar"
procedural safe,uards.
7%
The Court found no+inal da+a,es as the proper for+ of award, as it was
purposed to vindicate the ri,ht to procedural due process violated b" the e+plo"er.
7
A si+ilar
holdin, was +aintained in Iran v. #LRC
7#
and 'alaya Shipping v. #LRC.
7$
The doctrine has eEpress
statutor" basis, dul" reco,niCes the eEistence of the ri,ht to notice, and vindicates the violation of
such ri,ht. 2t is sound, lo,ical, and should be adopted as a ,eneral rule.
The assess+ent of no+inal da+a,es is left to the discretion of the court,
70
or in labor cases, of the
-abor Arbiter and the successive appellate levels. The authorit" to no+inate standards ,overnin,
the award of no+inal da+a,es has clearl" been dele,ated to the Dudicial branch, and it will serve
,ood purpose for this Court to provide such ,uidelines. Considerin, that the affected ri,ht is a
propert" ri,ht, there is Dustification in basin, the a+ount of no+inal da+a,es on the particular
characteristics attachin, to the clai+ant<s e+plo"+ent. 5actors such as len,th of service, positions
held, and received salar" +a" be considered to obtain the proper +easure of no+inal da+a,es.
After all, the de,ree b" which a propert" ri,ht should be vindicated is affected b" the esti+able value
of such ri,ht.
At the sa+e ti+e, it should be reco,niCed that no+inal da+a,es are not +eant to be co+pensator",
and should not be co+puted throu,h a for+ula based on actual losses. ConseBuentl", no+inal
da+a,es usuall" li+ited in pecuniar" value.
7;
This fact should be i+pressed upon the prospective
clai+ant, especiall" one who is conte+platin, seekin, actualAco+pensator" da+a,es.
Second. Actual or co+pensator" da+a,es are not available as a +atter of ri,ht to an e+plo"ee
dis+issed for Dust cause but denied statutor" due process. The" +ust be based on clear factual and
le,al bases,
7)
and correspond to such pecuniar" loss suffered b" the e+plo"ee as dul"
proven.
7*
Evidentl", there is less de,ree of discretion to award actual or co+pensator" da+a,es.
2 reco,niCe so+e inherent difficulties in establishin, actual da+a,es in cases for ter+inations
validated for Dust cause. The dis+issed e+plo"ee retains no ri,ht to continued e+plo"+ent fro+ the
+o+ent Dust cause for ter+ination eEists, and such ti+e +ost likel" would have arrived even before
the e+plo"er is liable to send the first notice. As a result, an award of backwa,es dis,uised as actual
da+a,es would al+ost never be Dustified if the e+plo"ee was dis+issed for Dust cause. The possible
eEception would be if it can be proven the ,round for Dust cause ca+e into bein, onl" after the
dis+issed e+plo"ee had stopped receivin, wa,es fro+ the e+plo"er.
>et it is not i+possible to establish a case for actual da+a,es if dis+issal was for Dust cause.
Particularl" actionable, for eEa+ple, is if the notices are not served on the e+plo"ee, thus ha+perin,
hisAher opportunities to obtain new e+plo"+ent. 5or as lon, as it can be de+onstrated that the
failure of the e+plo"er to observe procedural due process +andated b" the -abor Code is the
proEi+ate cause of pecuniar" loss or inDur" to the dis+issed e+plo"ee, then actual or co+pensator"
da+a,es +a" be awarded.
0hird. 2f there is a findin, of pecuniar" loss arisin, fro+ the e+plo"er violation, but the a+ount
cannot be proved with certaint", then te+perate or +oderate da+a,es are available under Article
###0 of the Civil Code. A,ain, sufficient discretion is afforded to the adDudicator as re,ards the
proper award, and the award +ust be reasonable under the circu+stances.
77
Te+perate or no+inal
da+a,es +a" "et prove to be a plausible re+ed", especiall" when co++on sense dictates that
pecuniar" loss was suffered, but incapable of precise definition.
2ourth. Moral and eEe+plar" da+a,es +a" also be awarded in the appropriate circu+stances. As
pointed out b" the +ecision) +oral da+a,es are recoverable where the dis+issal of the e+plo"ee
was attended b" bad faith, fraud, or was done in a +anner contrar" to +orals, ,ood custo+s or
public polic", or the e+plo"er co++itted an act oppressive to labor.
74
EEe+plar" da+a,es +a" avail
if the dis+issal was effected in a wanton, oppressive or +alevolent +anner.
/ppropriate /ward of +amages to the /gabons
The records indicate no proof eEists to Dustif" the award of actual or co+pensator" da+a,es, as it
has not been established that the failure to serve the second notice on the A,abons was the
proEi+ate cause to an" loss or inDur". 2n fact, there is not even an" showin, that such violation
caused an" sort of inDur" or disco+fort to the A,abons. Nor do the" assert such causal relation.
Thus, the onl" appropriate award of da+a,es is no+inal da+a,es. Considerin, the circu+stances, 2
a,ree that an award of 5ifteen Thousand Pesos .P;,%%%.%%/ each for the A,abons is sufficient.
All pre+ises considered, 2 3:TE to8
./ 6EN> the PET2T2:N for lack of +erit, and A552RM the +ecision of the Court of Appeals
dated #$ !anuar" #%%$, with the M:6252CAT2:N that in addition, Riviera 1o+es be
:R6ERE6 to pa" the petitioners the su+ of 5ifteen Thousand Pesos .P;,%%%.%%/ each, as
no+inal da+a,es.
.#/ 1:-6 that henceforth, dis+issals for Dust cause +a" not be invalidated due to the failure
to observe the due process reBuire+ents under the -abor Code, and that the onl" inde+nit"
award available to the e+plo"ee dis+issed for Dust cause are da+a,es under the Civil Code
as dul" proven. An" and all previous rulin,s and state+ents of the Court inconsistent with
this holdin, are now dee+ed 2N:PERAT23E.
,!NTE O. T'NG!
/ssociate ,ustice
0oo3$o3e5

Penned b" Associate !ustice Marina -. BuCon and concurred in b" Associate !ustices
!osefina 'uevara&(alon,a and 6anilo B. Pine.
#
Rollo, p. 0.
$
2d., pp. $&0.
0
2d., p. 4#.
;
2d., p. $.
)
2d., p. *$.
*
2d., p. #%.
7
2d., pp. #&#$.
4
2d., p. 0;.
%
2d., pp. 0#&0$.

Rosario v. 3ictor" Rice+ill, '.R. No. 0*;*#, 4 5ebruar" #%%$, $4* (CRA *)%, *)*.
#
Re"es v. MaEi+<s Tea 1ouse, '.R. No. 0%7;$, #* 5ebruar" #%%$, $47 (CRA #77, #47.
$
(antos v. (an Mi,uel Corporation, '.R. No. 040), 0 March #%%$, $44 (CRA *#, 7#.
0
Colu+bus Philippine Bus Corporation v. N-RC, 0* Phil. 7, %% .#%%/.
;
6e PaulATin, Philip Custo+s Tailor v. N-RC, $)0 Phil. 4, %# .444/.
)
(ta. Catalina Colle,e v. N-RC, '.R. No. 0007$, 4 Nove+ber #%%$.
*
Cos+os Bottlin, Corporation v. N-RC, '.R. No. ;;, #$ :ctober 44*, #7 (CRA 0),
;$&;0.
7
'.R. No. -&047*;, # Nove+ber 4*4, 40 (CRA 0*#, 0*7.
4
!ud" Philippines, 2nc. v. N-RC, $;# Phil. ;4$, )%) .447/.
#%
Philippine&(in,apore Transport (ervices, 2nc. v. N-RC, $0$ Phil. #70, #4 .44*/.
#
(ee (tolt&Nielsen Marine (ervices, 2nc. v. N-RC, '.R. No. #7$4;, #4 6ece+ber 447,
$%% (CRA *$, *#%.
##
'.R. No. *%0%, #* !anuar" #%%%, $#$ (CRA 00;.
#$
'.R. No. 7%;7*, 7 5ebruar" 474, *% (CRA )4.
#0
2d. at *).
#;
2d.
#)
(olesbee v. Balkco+, $$4 =.(. 4, ) .4;%/ .5rankfurter, !., dissentin,/. 6ue process is
violated if a practice or rule Hoffends so+e principle of Dustice so rooted in the traditions and
conscience of our people as to be ranked as funda+entalFH (n"der v. Massachusetts, #4
=.(. 4*, %; .4$0/.
#*
6epart+ent :rder No. 4 took effect on # !une 44*. 6epart+ent :rder No. % took effect
on ## !une 44*.
#7
'.R. No. ;$40, #* (epte+ber 44;, #07 (CRA ;$;.
#4
'.R. No. ##))), 4 !une 44*, #*0 (CRA $7).
$%
'.R. No. 0$$, #4 !ul" 44), #;4 (CRA )44, *%%.
$
(errano, supra, 3itu,, !., (eparate .Concurrin, and 6issentin,/ :pinion, $#$ (CRA ;#0,
;#4&;$% .#%%%/.
$#
Capili v. N-RC, '.R. No. *$*7, #) March 44*, #*% (CRA 077, 04;.
$$
5ilipro, 2nc. v. N-RC, '.R. No. -&*%;0), ) :ctober 47), 0; (CRA #$.
$0
Calalan, v. 9illia+s, *% Phil. *#), *$; .40%/.
$;
'elos v. Court of Appeals, '.R. No. 7)7), 7 Ma" 44#, #%7 (CRA )%7, )).
$)
'.R. No. #%%, #* Ma" 440, #$# (CRA )$, )7.
$*
Art. ###, Civil Code.
$7
'.R. No. %70%;. April 0, #%%$ citin, Twikwa" En,ineerin, 9orks v. N-RC, '.R. No.
7;%0, ## March 44, 4; (CRA ;#), ;$#F Aurelio v. N-RC, '.R. No. 44%$0, # April
44$, ## (CRA 0$#, 00$F and(a+pa,uita 'ar+ents Corporation v. N-RC, '.R. No.
%#0%), * !une 440, #$$ (CRA #)%, #);.
$4
2d. citin, Better Buildin,s, 2nc. v. N-RC, '.R. No. %4*0, ; 6ece+ber 44*, #7$ (CRA
#0#, #;F 2ran v. N-RC, '.R. No. #4#*, ## April 447, #74 (CRA 0$$, 00#.
0%
(avellano v. Northwest Airlines, '.R. No. ;*7$, 7 !ul" #%%$.
0
3illar v. N-RC, '.R. No. $%4$;, Ma" #%%%.
0#
Rollo, pp. )%&*.
0$
=(T 5acult" =nion v. N-RC, '.R. No. 4%00;, # :ctober 44%.
00
H9hereasH clauses, P.6. No. 7;.
0;
HArt. $. 9a,e deduction. & No e+plo"er, in his own behalf or in behalf of an" person,
shall +ake an" deduction fro+ the wa,es of his e+plo"ees eEcept8
.a/ 2n cases where the worker is insured with his consent b" the e+plo"er, and the
deduction is to reco+pense the e+plo"er for the a+ount paid b" hi+ as pre+iu+ on
the insuranceF
.b/ 5or union dues, in cases where the ri,ht of the worker or his union to check off
has been reco,niCed b" the e+plo"er or authoriCed in writin, b" the individual
worker concernedF and
.c/ 2n cases where the e+plo"er is authoriCed b" law or re,ulations issued b" the
(ecretar" of -abor and E+plo"+ent.
T'NG!, J.

$7% Phil. 0) .#%%%/.


#
Id.
$
Id. at 00$, 00;, 007.
0
Rollo, p. 0#.
;
Id. at $#.
)
Ibid.
*
Id. at ;4&)%.
7
Id. at ;.
4
Id. at $0.
%
Id. at 4#.

Id. at 4. The address indicated in the identification cards was H3 ) CruC 2ron 9orks, E.
Rodri,ueC ParaJaBue Cit".H
#
Ibid citing PA- v. N-RC, #*4 (CRA ;$$.
$
2n a 6ecision dated # Au,ust #%%%, penned b" Co++issioner 3.R. Cala"ca", and
concurred in b" Presidin, Co++issioner R. ABuino and Co++issioner A. 'acutan.
0
Rollo, p. #*.
;
Penned b" Associate !ustice M. BuCon, concurred in b" Associate !ustices !. 'uevara&
(alon,a and 6. Pine.
)
2n their Petition for Certiorari before the Court of Appeals, the A,abons particularl" clai+ed
that the" were reBuired to work on four holida"s, na+el", Araw N, Ta,itin,an, National
1eroes 6a", Bonifacio 6a", and RiCal 6a". See Rollo, p. ;0.
*
6educted fro+ 3ir,ilio A,abon<s thirteenth .$th/ +onth pa" were his ((( loan and
eEpenses for shoes. Rollo, pp. *&*#.
7
Rollo, p. *$.
4
Id. at ##.
#%
Id. at #$ citing Tin,siCe Manufacturin, Corporation v. N-RC, #$7 (CRA $04.
#
Rollo, p. #%.
##
Palencia v. N-RC, '.R. No. -&*;*)$, # Au,ust 47*F Pure Blue 2ndustries v. N-RC, '.R.
No. ;7*4, ) April 44*.
#$
Rollo, pp. #4, *%.
#0
Both the N-RC and the Court of Appeals noted that the % !une 444 conference between
the A,abons and Riviera 1o+es was at the behest of the A,abons, thus counterin, the clai+
of strained relations. Rollo, pp. $%, *%&*.
#;
Rollo, p. 4.
#)
Supra note ).
#*
Id.
#7
Supra note .
#4
Supra note at 00).
$%
See (ection , Republic Act No. %;#, which states8
(ec. . 2n cases of e+plo"+ent, without a definite period, in a co++ercial, industrial,
or a,ricultural establish+ent or enterprise, the e+plo"er or the e+plo"ee +a"
ter+inate at an" ti+e the e+plo"+ent with Dust causeF or without Dust cause in the
case of an e+plo"ee b" servin, written notice on the e+plo"er at least one +onth in
advance, or in the case of an e+plo"er, b" servin, such notice to the e+plo"ee at
least one +onth in advance or one&half +onth for ever" "ear of service of the
e+plo"ee, whichever is lon,er, a fraction of at least siE +onths bein, considered as
one whole "ear.
The e+plo"ee, upon who+ no such notice was served in case of ter+ination of
e+plo"+ent without Dust cause shall be entitled to co+pensation fro+ the date of
ter+ination of his e+plo"+ent in an a+ount eBuivalent to his salaries or wa,es
correspondin, to the reBuired period of notice.
$
#0 Phil. )47 .4))/.
$#
Id. at *%$.
$$
$4 Phil. *0* .4)4/.
$0
Id. at *;0.
$;
(errano v. N-RC, supra note at 00*.
$)
'.R. No. -&$707#, 7 !une 4*), * (CRA 0*%.
$*
(errano v. N-RC, supra note at 07%.
$7
(errano, supra note at 00;&00).
$4
'.R. No. 7;), 7 !anuar" 44, 4$ (CRA ;*.
0%
Id. at )*.
0
See '. 'unther and T. (ullivan, Constitutional -aw .0th ed./ at 7)*.
0#
(eparate :pinion of !ustice Pan,aniban, p. #.
0$
See e.g., Morehead v. (tate of New >ork, #47 =.(. ;7* .4$)/, which affir+ed the
invalidit" of +ini+u+ wa,e laws as previousl" declared in Adkins v. Children<s 1ospital, #)
=.(. ;#; .4#$/.
00
5a+ousl" Dustified b" the (upre+e Court as an assertion of the Hlibert" of contractH, or Hthe
ri,ht to contract about one<s affairsH, as contained in the 5ourteenth A+end+ent. Adkins v.
Children<s 1ospital, #) =.(. ;#;, ;0;. .4#$/. But as !ustice 1ol+es fa+ousl" critiBued8
HContract is not speciall" +entioned in the teEt .of the 5ourteenth A+end+ent/ that we have
to construe. 2t is +erel" an eEa+ple of doin, what "ou want to do, e+bodied in the word
libert". But prett" +uch all law consists in forbiddin, +en to do so+e thin,s that the" want to
do, and contract is no +ore eEe+pt fro+ law than other acts.H Adkins v. Children<s
1ospital. Id. at ;)7.
0;
See People v. Tudtud, '.R. No. 00%$*, #) (epte+ber #%%$.
0)
'.R. No. %)%#*, #$0 (CRA 00, #; !ul" 440.
0*
Id. at 0;&0;#.
07
$$; Phil. 7# .44*/. The Court therein was divided, with twelve votin, for, and three
a,ainst the decision. 2nterestin,l", both !ustices Puno and Pan,aniban adopted the
dissentin, position that the provisions of Article ?22 of the Constitution alone were insufficient
to accord the 5ilipino bidder a preferential ri,ht to obtain the winnin, bid for Manila 1otel.
Their concession as to the enforceabilit" of para,raph #, (ection %, Article ?22 of the
Constitution without enablin, le,islation was in a situation wherein if the bids of the 5ilipino
and the forei,n entit" were tied. Id. at ;0 .,. Puno, dissenting/ and ;0 .,.
Pan,aniban, dissenting/.
04
Id. at %# citing ) A+ !ur. #d #7.
;%
Id. at %$&%0 citing ) A+ !ur #d #7$&#70.
;
22 Record of the Constitutional Co++ission8 Proceedin,s and 6ebates )$.
;#
Id. at )*.
;$
Id. at )#).
;0
Id. at )00.
;;
The test su,,ested b" !ustice Puno in the Manila 1otel case, supra note 0*, is as definitive
as an" proposed +ethod of anal"sis could ever be. HA searchin, inBuir" should be +ade to
find out if the provision is intended as a present enact+ent, co+plete in itself as a definitive
law, or if it needs future le,islation for co+pletion and enforce+ent. The inBuir" de+ands a
+icro&anal"sis and the conteEt of the provision in Buestion.H ,. Puno, dissenting, id. at 0&
0#. See also Rev. Pa+aton, v. C:ME-EC, '.R. No. )7*#, $ April #%%0.
;)
!. Bernas, The 47* Constitution of the Republic of the Philippines8 A Co++entar" .44)/,
at %)0.
;*
Article $, Chapter 2 of the -abor Code declares8
+eclaration of basic policy.LThe (tate shall afford full protection to labor, pro+ote
full e+plo"+ent, ensure eBual work opportunities re,ardless of seE, race or creed,
and re,ulate the relations between workers and e+plo"ers. The (tate shall assure
the ri,hts of workers to self&or,aniCation, collective bar,ainin,, securit" of tenure and
Dust and hu+ane conditions of work.
;7
See Phil. Aeolus Auto+otive =nited Corp. v. N-RC, $7* Phil #;% .#%%%/F 'onCales v.
National -abor Relations Co++ission, $*# Phil $4 .444/F !ardine 6avies v. National -abor
Relations Co++ission, $*% Phil $% .444/F Pearl (. Buck 5oundation v. National -abor
Relations Co++ission, '.R. No. 7%*#7, 5ebruar" #, 44%, 7# (CRA 00)F Ba,on, Ba"an
Corporation, Realt" 2nvestors @ 6evelopers v. National -abor Relations Co++ission, '.R.
No. )#*#, (epte+ber #4, 474, *7 (CRA %*F -abaDo v. AleDandro, et al., '.R. NoA -&
7%$7$, (epte+ber #), 477, ); (CRA *0*F 6.M. ConsunDi, 2nc. v. Pucan, et al., '.R. No. -&
*0$, March #, 477F ;4 (CRA %*F (antos v. National -abor Relations Co++ission,
'.R. No. -&*)#*,(epte+ber #, 47*, ;0 (CRA ))F People<s Bank @ Trust Co. v.
People<s Bank @ Trust Co. E+plo"ees =nion, ) Phil ; .4*)/F Philippine Movie Pictures
Association v. Pre+iere Productions, 4# Phil. 70$ .4;$/F Phil. Refinin, Co. v. 'arcia, supra.
;4
(errano v. N-RC, supra note .
)%
(ection #, Rule ??222, Book 3, :+nibus Rules 2+ple+entin, the -abor Code.
)
Supra note #.
)#
(errano v. N-RC, supra note at 00;.
)$
'.R. No. 7%;7*, 7 5ebruar" 474, *% (CRA )4.
)0
(errano, supra note at 0;$.
);
(errano, supra note at 07;F ,. 3itu,, separate concurrin, and dissentin,.
))
BalaBueCon E9T= v. Ra+ora, '.R. No. -&0)*))&*, April 47%, 4* (CRA ;, 7.
)*
HEEE without preDudice, however, to whatever ri,hts, benefits, and privile,es he +a" have
under the applicable individual or collective bar,ainin, a,ree+ent with the e+plo"er or
voluntar" e+plo"er polic" or practiceH. (ection *, Rule , Book 32, :+nibus Rules
2+ple+entin, the -abor Code.
)7
See Philippine Rabbit Bus -ines, 2nc. v. N-RC, '.R. No. 47$*, ; (epte+ber 44*, #*4
(CRA %), ;, citin, cases.
)4
A,uila v. C52, '.R. No. -&07$$;, ; April 477, )% (CRA $;#, $)%. H5or all its conceded
+erits, eBuit" is available onl" in the absence of law and not as its replace+ent. EBuit" is
described as Dustice outside le,alit", which si+pl" +eans that it cannot supplant althou,h it
+a", as often happens, supple+ent the law.HId.
*%
*% (CRA )4 .474/.
*
'.R. No. #%%, Ma" #*, 440, #$# (CRA )$.
*#
Black<s -aw 6ictionar", 44% ed., p. $$F citing 1idden 1ollow Ranch v. Collins, 0) Mont.
$#, 0%) P.#d $);, $)7.
*$
*% (CRA )4 .474/.
*0
Serrano v. #LRC, supra note at 00#.
*;
See e.g., Reta v. N-RC, '.R. No. #%%, #* Ma" 440, #$# (CRA )$, wherein the
Court held that Hprivate respondents should pa" petitioner P%,%%%.%% as penalt" for failure
to co+pl" with the due process reBuire+ent.H Id. at )7.
*)
A. Tolentino, Civil Code of the Philippines .44% ed./, at F citing 4 5abres %.
**
Article ###, Civil Code.
*7
5errer v. N-RC, '.R. No. %%747, ; !ul" 44$F citin, Callanta vs. Carnation Philippines,
2nc., 0; (CRA #)7.
*4
$0* Phil. ;#, ;$ .44*/.
7%
Id. at ;$.
7
Id.
7#
'.R. No. #4#*, ## April 447.
7$
'.R. No. #)47, #) March 447. The ponente in all three cases was !ustice 5lerida Ruth
Ro+ero.
70
See Article ##), Civil Code. See also (aludo v. Court of Appeals, '.R. No. 4;;$), #$
March 44#.
7;
2n relation to Article ###0 of the Civil Code, no+inal da+a,es are less than
te+perateA+oderate da+a,es or co+pensator" da+a,es.
7)
See 6e la PaC, !r. v. 2AC, ;0 (CRA );F ChaveC v. 'onCales, $# (CRA ;0*.
7*
See Art. #44, Civil Code.
77
Art. ###;, Civil Code.
74
Pa,e ), +ecision, citin, Durisprudence.