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[G.R. No.

November 17, 2004]

compensation to his employees and to observe the

procedural requirements of notice and hearing in
the termination of his employees.
Procedure of termination (Omnibus Rules
Implementing the Labor Code):
a. A written notice to the employee specifying the
grounds for termination and giving the employee
reasonable opportunity to be heard
b. A hearing where the employee is given the
opportunity to respond to the charges against him
and present evidence or rebut the evidence
presented against him (if he so requests)
c. A written notice of termination indicating that
grounds have been established to justify his
termination upon due consideration of all

Virgilio and Jenny Agabon worked for respondent Riviera
Home Improvements, Inc. as gypsum and cornice installers
from January 1992 until Feb 1999. Their employment was
terminated when they were dismissed for allegedly
abandoning their work. Petitioners Agabon then filed a case of
illegal dismissal. /// The LA ruled in favor of the spouses and
ordered Riviera to pay them their money claims. The NLRC
reversed the LA, finding that the Agabons were indeed guilty
of abandonment. The CA modified the LA by ruling that there
was abandonment but ordering Riviera to pay the Agabons
money claims.///
The arguments of both parties are as follows:
The Agabons claim, among others that Riviera violated
the requirements of notice and hearing when the latter did not
send written letters of termination to their addresses.
Riviera admitted to not sending the Agabons letters of
termination to their last known addresses because the same
would be futile, as the Agabons do not reside there anymore.
However, it also claims that the Agabons abandoned their
work. More than once, they subcontracted installation works
for other companies. They already were warned of termination
if the same act was repeated, still, they disregarded the

In this case, Riviera failed to notify the Agabons of their

termination to their last known addresses. Hence, they
violated the procedural requirement laid down by the law
in the termination of employees.

1. Whether the Agabons were illegally dismissed
2. Whether Riviera violated the requirements of notice and
3. Is the violation of the procedural requirements of notice
and hearing for termination of employees a violation of the
Constitutional due process?
4. What are the consequences of violating the procedural
requirements of termination?
RULING: Valid dismissal but violation of statutory due
process = payment of nominal damages (P30,000) &
balance of 13th month pay, etc.
1. No. There was just cause for their dismissal, i.e.,
abandonment. Art. 282 specifies the grounds for just
dismissal, to wit:
a. Serious misconduct or willful disobedience of the
lawful orders of the employer or his duly authorized
representative in connection with the employees
b. Gross and habitual neglect of the by the employee of
his duties (includes abandonment)
c. Fraud or willful breach of the trust reposed by the
employer or his duly authorized representative to the
d. Commission of a crime or offense by the employee
against the person of the employer or any member of
his immediate family or his duly authorized
e. Any other causes analogous to the foregoing.
To establish abandonment, two elements must be present:
a. The unjustified failure of the employee to report for
b. A clear intention to sever e-e relationship, manifested
by overt acts
Here, the Agabons were frequently absent from work for
having performed installation work for another company,
despite prior warning given by Riviera. This clearly
establishes an intention to sever the e-e relationship
between them, and which constitutes abandonment.

Yes. While the employer has the right to expect good

performance, diligence, good conduct and loyalty from its
employees, it also has the duty to provide just

No. Constitutional due process is that provided under

the Constitution, which involves the protection of the
individual against governmental oppression and the
assurance of his rights In civil, criminal and administrative
proceedings; statutory due process is that found in the
Labor Code and its Implementing Rules and protects the
individual from being unjustly terminated without just or
authorized cause after notice and hearing.
The two are similar in that they both have two aspects:
substantive due process and procedural due
process. However, they differ in that under the Labor
Code, the first one refers to the valid and authorized
causes of employment termination, while the second one
refers to the manner of dismissal. A denial of statutory due
process is not the same as a denial of Constitutional due
process for reasons enunciated in Serrano v. NLRC.


The dismissal is valid, but Riviera should pay nominal

damages to the Agabons in vindication of the latter for
violating their right to notice and hearing. The penalty is in
the nature of a penalty or indemnification, the amount
dependent on the facts of each case, including the nature
of gravity of offense of the employer.
In this case, the Serrano doctrine was re-examined.
First, in the Serrano case, the dismissal was upheld, but it
was held to be ineffectual (without legal effect). Hence,
Serrano was still entitled to the payment of his backwages
from the time of dismissal until the promulgation of the
court of the existence of an authorized cause. Further, he
was entitled to his separation pay as mandated under Art.
283. The ruling is unfair to employers and has the danger
of the following consequences:
a. The encouragement of filing frivolous suits even by
notorious employees who were justly dismissed but
were deprived of statutory due process; they are
rewarded by invoking due process
b. It would create absurd situations where there is just or
authorized cause but a procedural infirmity invalidates
the termination, ie an employee who became a
criminal and threatened his co-workers lives, who fled
and could not be faound
c. It could discourage investments that would generate
employment in the economy
Second, the payment of backwages is unjustified as only
illegal termination gives the employee the right to be paid
full backwages. When the dismissal is valid or upheld, the
employee has no right to backwages.


Dismissals based on just causes: acts or

omissions attributable to the employee; no right to
claim backwages or to pay separation pay
(separation pay is subject to exception, ie if
termination is not based on serious misconduct or a
conduct reflecting the moral depravity of a person,
separation pay may be granted by reason of social
Dismissals based on authorized causes: involve
grounds provided under the Labor Code; employee
(and DOLE) is entitled the payment of separation pay
(redundancy and installation of labor-saving devices:

1 month pay or 1 month/yr of service, whichever is

higher; retrenchment and closure or cessation of
business: 1 month pay or month per year of
service, whichever is higher)
Illegal termination: employee is entitled to the
payment of full backwages as well as reinstatement
without loss of seniority rights and other privileges,
inclusive of allowances and other monetary claims
from the time compensation was withheld until
reinstatement; if reinstatement is not possible,
separation pay shall be given.