Serrano Vs NLRC

VOL.
323, JANUARY 27, 2000
445
Serrano vs. National Labor Relations Commission
G.R. No. 117040. January 27, 2000.*
RUBEN SERRANO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and ISETANN
DEPARTMENT STORE, respondents.
Labor Law; Dismissal; Absent proof that management acted in a malicious or arbitrary manner, the
Court will not interfere with the exercise of judgment by an employer.—As we pointed out in another
case, the “[management of a company] cannot be denied the faculty of promoting efficiency and
attaining economy by a study of what units are essential for its operation. To it belongs the ultimate
determination of whether services should be performed by its personnel or contracted to outside
agencies . . . [While there] should be mutual consultation, eventually deference is to be paid to what
management decides.”—Consequently, absent proof that management acted in a malicious or arbitrary
manner, the Court will not interfere with the exercise of judgment by an employer.
Same; Same; Termination of petitioner’s services was for an authorized cause, i.e., redundancy.—That
the phase-out of the security section constituted a “legitimate business decision”—is a factual finding of
an administrative agency which must be accorded respect and even finality by this Court since nothing
can be found in the record which fairly detracts from such finding. Accordingly, we hold
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* EN BANC.
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SUPREME COURT REPORTS ANNOTATED
that the termination of petitioner’s services was for an authorized cause, i.e., redundancy. Hence,
pursuant to Art. 283 of the Labor Code, petitioner should be given separation pay at the rate of one
month pay for every year of service.
Same; Same; Due Process; It is now settled that where the dismissal of one employee is in fact for a just
and valid cause and is so proven to be but he is not accorded his right to due process x x x the dismissal
shall be upheld but the employer must be sanctioned for non-compliance with the requirements of or
for failure to observe, due process.—This is not the first time this question has arisen. In Sebuguero v.
NLRC, workers in a garment factory were temporarily laid off due to the cancellation of orders and a
garment embargo. The Labor Arbiter found that the workers had been illegally dismissed and ordered
the company to pay separation pay and backwages. The NLRC, on the other hand, found that this was a
case of retrenchment due to business losses and ordered the payment of separation pay without
backwages. This Court sustained the NLRC’s finding. However, as the company did not comply with the
30-day written notice in Art. 283 of the Labor Code, the Court ordered the employer to pay the workers
P2,000.00 each as indemnity. The decision followed the ruling in several cases involving dismiss-als
which, although based on any of the just causes under Art. 282, were effected without notice and
hearing to the employee as required by the implementing rules. As this Court said: “It is now settled that
where the dismissal of one employee is in fact for a just and valid cause and is so proven to be but he is
not accorded his right to due process, i.e., he was not furnished the twin requirements of notice and
opportunity to be heard, the dismissal shall be upheld but the employer must be sanctioned for non-
compliance with the requirements of, or for failure to observe, due process.”—
Same; Same; Same; Rule reversed a long standing policy that the dismissal or termination is illegal if
effected without notice to the employee.—The rule reversed a long standing policy theretofore followed
that even though the dismissal is based on a just cause or the termination of employment is for an
authorized cause, the dismissal or termination is illegal if effected without notice to the employee. The
shift in doctrine took place in 1989 in Wenphil Corp. v. NLRC. In announcing the change, this Court said:
x x x However, the petitioner must nevertheless be held to account for failure to extend to private
respondent his right to an investigation before
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causing his dismissal. The rule is explicit as above discussed. The dismissal of an employee must be for
just or authorized cause and after due process. Petitioner committed an infraction of the second
requirement. Thus, it must be imposed a sanction for its failure to give a formal notice and conduct an
investigation as required by law before dismissing petitioner from employment. Considering the
circumstances of this case petitioner must indemnify the private respondent the amount of P1,000.00.
The measure of this award depends on the facts of each case and the gravity of the omission committed
by the employer.
Same; Same; Same; The Due Process Clause of the Constitution is a limitation on government powers.—
The first is that the Due Process Clause of the Constitution is a limitation on governmental powers. It
does not apply to the exercise of private power, such as the termination of employment under the labor
Code. This is plain from the text of Art. III, §1 of the Constitution, viz.: “No person shall be deprived of
life, liberty, or property without due process of law . . . .”—The reason is simple: Only the State has
authority to take the life, liberty, or property of the individual. The purpose of the Due Process Clause is
to ensure that the exercise of this power is consistent with what are considered civilized methods.
Same; Same; Same; Notice and hearing under the Due Process Clause before the power of organized
society are brought to bear upon the individual.—The second reason is that notice and hearing are
required under the Due Process Clause before the power of organized society are brought to bear upon
the individual. This is obviously not the case of termination of employment under Art. 283. Here the
employee is not faced with an aspect of the adversary system. The purpose for requiring a 30-day
written notice before an employee is laid off is not to afford him an opportunity to be heard on any
charge against him, for there is none. The purpose rather is to give him time to prepare for the eventual
loss of his job and the DOLE an opportunity to determine whether economic causes do exist justifying
the termination of his employment.
Same; Same; Same; Not all notice requirements are requirements of due process.—Not all notice
requirements are requirements of due process. Some are simply part of a procedure to be followed
before a right granted to a party can be exercised. Others are simply an application of the Justinian
precept, embodied in the Civil Code,
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to act with justice, give everyone his due, and observe honesty and good faith toward one’s fellowmen.
Such is the notice requirement in Arts. 282-283. The consequence of the failure either of the employer
or the employee to live up to this precept is to make him liable in damages, not to render his act
(dismissal or resignation, as the case may be) void. The measure of damages is the amount of wages the
employee should have received were it not for the termination of his employment without prior notice.
If warranted, nominal and moral damages may also be awarded.
Same; Same; Same; Employer’s failure to comply with the notice requirement does not constitute a
denial of due process but a mere failure to observe a procedure for the termination of employment
which makes the termination of employment merely ineffectual.—We hold, therefore, that, with
respect to Art. 283 of the Labor Code, the employer’s failure to comply with the notice requirement
does not constitute a denial of due process but a mere failure to observe a procedure for the
termination of employment which makes the termination of employment merely ineffectual. It is similar
to the failure to observe the provisions of Art. 1592, in relation to Art. 1191, of the Civil Code in
rescinding a contract for the sale of immovable property. Under these provisions, while the power of a
party to rescind a contract is implied in reciprocal obligations, nonetheless, in cases involving the sale of
immovable property, the vendor cannot exercise this power even though the vendee defaults in the
payment of the price, except by bringing an action in court or giving notice of rescission by means of a
notarial demand. Consequently, a notice of rescission given in the letter of an attorney has no legal
effect, and the vendee can make payment even after the due date since no valid notice of rescission has
been given.
Same; Same; Same; Whether the employee is reinstated or only granted separation pay, he should be
paid full backwages if he has been laid off without written notice at least 30 days in advance.—In sum,
we hold that if in proceedings for reinstatement under Art. 283, it is shown that the termination of
employment was due to an authorized cause, then the employee concerned should not be ordered
reinstated even though there is failure to comply with the 30-day notice requirement. Instead, he must
be granted separation pay in accordance with Art. 283. x x x If the employee’s separation is without
cause, instead of being given separation pay, he should be reinstated. In either case, whether he is
reinstated or only granted
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separation pay, he should be paid full backwages if he has been laid off without written notice at least
30 days in advance.
BELLOSILLO, J., Separate Opinion:
Labor Law; Dismissal; Just and authorized causes for termination of employment by the employer.—
Article 282 of the Labor Code enumerates the just causes for the termination of employment by the
employer: (a) serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or the latter’s representative in connection with the employee’s work; (b) gross and habitual
neglect by the employee of his duties; (c) fraud or willful breach by the employee of the trust reposed in
him by his employer or his duly authorized representative; (d) commission of a crime or offense by the
employee against the person of his employer or any immediate member of his family or his duly
authorized representative; and, (e) other causes analogous to the foregoing. On the other hand, Arts.
283 and 284 of the same Code enumerate the so-called authorized causes: (a) installation of labor saving
devices; (b) redundancy; (c) retrenchment to prevent losses; (d) closure or cessation of the
establishment or undertaking unless the closure or cessation is for the purpose of circumventing the
provisions of the law; and, (e) disease.
Same; Same; When is a position redundant.—In the instant case, we agree with the NLRC that the
dismissal of petitioner Ser-rano was for an authorized cause, i.e., redundancy, which exists where the
services of an employee are in excess of what are reasonably demanded by the actual requirements of
the enterprise. A position is redundant where it is superfluous, and the superfluity may be the outcome
of other factors such as overhiring of workers, decreased volume of business, or dropping of a particular
product line or service activity previously manufactured or undertaken by the enterprise.
Same; Same; Hiring of an independent security agency is a business decision properly within the exercise
of management prerogative; The wisdom or soundness of the management decision is not subject to
the discretionary review of the Labor Arbiter nor of the National Labor Relations Commission.—The
hiring of an independent security agency is a business decision properly within the exercise of
management prerogative. As such, this Court is denied the authority to delve into its wisdom although it
is equipped with the
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power to determine whether the exercise of such prerogative is in accordance with law. Consequently,
the wisdom or soundness of the management decision is not subject to the discretionary review of the
Labor Arbiter nor of the NLRC unless there is a violation of law or arbitrariness in the exercise thereof, in
which case, this Court will step in. Specifically, we held in International Harvester Macleod, Inc. v.
Intermediate Appellate Court that the determination of whether to maintain or phase out an entire
department or section or to reduce personnel lies with management. The determination of the need for
the phasing out of a department as a labor and cost saving device because it is no longer economical to
retain its services is a management prerogative.
Same; Same; Due Process; Employer may terminate the employment of any employee due to
redundancy by serving a written notice on the worker and the DOLE at least one (1) month before the
intended date thereof.—As specifically provided in Art. 283 of the Labor Code, the employer may
terminate the employment of any employee due to redundancy by serving a written notice on the
worker and the DOLE at least one (1) month before the intended date thereof. In the instant case,
ISETANN clearly violated the provisions of Art. 283 on notice. It did not send a written notice to DOLE
which is essential because the right to terminate an employee is not an absolute prerogative. The lack of
written notice denied DOLE the opportunity to determine the validity of the termination.
Same; Same; Same; Although the cause for discharge may be just or authorized, it is still necessary and
obligatory to afford the employee concerned his basic and more important right to notice.—The written
notice ISETANN sent to Serrano was dated 11 October 1991 or on the same day the intended
termination was to take effect. This obviously did not comply with the 30-day mandatory requirement.
Although the cause for discharge may be just or authorized, it is still necessary and obligatory to afford
the employee concerned his basic and more important right to notice. Serrano was not given the chance
to make the needed adjustments brought about by his termination.
Same; Same; Same; Failure to send notice of termination to Serrano, not tantamount to violation of his
constitutional right to due process but merely constitutes non-compliance with the provision on notice
under Article 283 of the Labor Code.—We are of the view that
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failure to send notice of termination to Serrano is not tantamount to violation of his constitutional right
to due process but merely constitutes non-compliance with the provision on notice under Art. 283 of the
Labor Code.
Same; Same; Same; Non-observance of the notice requirement is not denial of due process but merely a
failure to comply with legal obligation.—From the foregoing, it is clear that the observance of due
process is demanded in governmental acts. Particularly in administrative proceedings, due process starts
with the tribunal or hearing officer and not with the employer. In the instant case, what is mandated of
the employer to observe is the 30-day notice requirement. Hence, non-observance of the notice
requirement is not denial of due process but merely a failure to comply with a legal obligation for which,
we strongly recommend, we impose a disturbance compensation as discussed hereunder.
Same; Same; Same; Court has consistently upheld in the past as valid although irregular the dismissal of
an employee for a just or authorized cause but without notice.—We have consistently upheld in the past
as valid although irregular the dismissal of an employee for a just or authorized cause but without notice
and have imposed a sanction on the erring employers in the form of damages for their failure to comply
with the notice requirement.
Same; Same; Same; Petitioner’s dismissal being improper and irregular, he is entitled to separation pay
and backwages the amounts of which to be determined by the Labor Arbiter, plus P 10,000.00 as
disturbance compensation.—In the instant case, Serrano was given his walking papers only on the very
same day his termination was to take effect. DOLE was not served any written notice. In other words,
there was non-observance of the 30-day notice requirement to both Serrano and the DOLE. Serrano was
thus terminated for an authorized cause but was not accorded his right to 30-day notice. Thus, his
dismissal being improper and irregular, he is entitled to separation pay and back wages the amounts of
which to be determined by the Labor Arbiter, plus P10,000.00 as disturbance compensation which, from
its very nature, must be paid immediately to cushion the impact of his economic dislocation.
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PUNO, J., Dissenting Opinion:
Labor Law; Dismissal; To justify dismissal of an employee for a just cause, employee must be given two
kinds of notice by his employer; Pre and post notice requirements are not mere technicalities but are
requirements of due process.—The long established jurisprudence is that to justify dismissal of an
employee for a just cause, he must be given two kinds of notice by his employer, viz.: (1) notice to
apprise the employee of the particular acts or omissions for which the dismissal is sought, and (2)
subsequent notice to inform him of the employer’s decision to dismiss him. Similarly, deeply ingrained is
our ruling that these pre and post notice requirements are not mere technicalities but are requirements
of due process.
Same; Same; Four (4) authorized causes for termination of employment under Article 283 of the Labor
Code; The right to dismiss on authorized causes is not an absolute prerogative of an employer.—The
case at bar specifically involves Article 283 of the Labor Code which lays down four (4) authorized causes
for termination of employment. These authorized causes are: (1) installation of labor-saving devices; (2)
redundancy; (3) retrenchment to prevent losses; and (4) closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of circumventing the law. It also
provides that prior to the dismissal of an employee for an authorized cause, the employer must send
two written notices at least one month before the intended dismissalone notice to the employee and
another notice to the Department of Labor and Employment (DOLE). We have ruled that the right to
dismiss on authorized causes is not an absolute prerogative of an employer.
Same; Same; The burden should be on the employer to establish and justify the authorized causes.—The
burden should be on the employer to establish and justify these authorized causes. Due to their
complexity, the law correctly directs that notice should be given to the DOLE for it is the DOLE more
than the lowly employee that has the expertise to validate the alleged cause in an appropriate hearing.
In fine, the DOLE provides the equalizer to the powers of the employer in an Article 283 situation.
Without the equalizing influence of DOLE, the employee can be abused by his employer.
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VITUG, J., Separate Opinion:
Labor Law; Dismissal; An employee whose employment is terminated for a just cause is not entitled to
the payment of separation benefits; Separation pay would be due, when the lay-off is on account of an
authorized cause.—An employee whose employment is terminated for a just cause is not entitled to the
payment of separation benefits. Separation pay would be due, however, when the lay-off is on account
of an authorized cause. The amount of separation pay would depend on the ground for the termination
of employment. A lay-off due to the installation of a labor saving device, redundancy (Article 283) or
disease (Article 284), entitles the worker to a separation pay equivalent to “one (1) month pay or at least
one (1) month pay for every year of service, whichever is higher.”—When the termination of
employment is due to retrenchment to prevent losses, or to closure or cessation of operations of an
establishment or undertaking not due to serious business losses or financial reverses, the separation pay
is only an equivalent of “one (1) month pay or at least one-half (1/2) month pay for every year of
service, whichever is higher.”—In the above instances, a fraction of at least six (6) months is considered
as one (1) whole year.
Same; Same; Due process in the context of a termination of employment would be two-fold, i.e.,
substantive and procedural due process.—Due process in the context of a termination of employment,
particularly, would be two-fold, i.e., substantive due process which is complied with when the action of
the employer is predicated on a just cause or an authorized cause, and procedural due process which is
satisfied when the employee has the opportunity to contest the existence of the ground invoked by the
employer in terminating the contract of employment and to be heard thereon.
Same; Same; Same; Damages; If an employer fails to comply with the requirements of notice in
terminating the services of the employee, the employer must be made to pay corresponding damages to
the employee.—Where there is just cause or an authorized cause for the dismissal or lay-off but the
required written notices therefor have not been properly observed by an employer, it would neither be
right and justifiable nor likely intended by law to order either the reinstatement of the dismissed or laid-
off employee or the payment of back salaries to him simply for the lack of such notices if, and so long as,
the employee is not deprived of an opportunity to contest
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that dismissal or lay-off and to accordingly be heard thereon. In the termination of employment for an
authorized cause (this cause being attributable to the employer), the laid-off employee is statutorily
entitled to separation pay, unlike a dismissal for a just cause (a cause attributable to an employee)
where no separation pay is due. In either case, if an employer fails to comply with the requirements of
notice in terminating the services of the employee, the employer must be made to pay, as so
hereinabove expressed, corresponding damages to the employee.
PANGANIBAN, J., Separate Opinion:
Labor Law; Dismissal; When an employee is dismissed without notice and hearing, the effect is an illegal
dismissal and the appropriate reliefs are reinstatement and full back wages.—In short, when an
employee is dismissed without notice and hearing, the effect is an illegal dismissal and the appropriate
reliefs are reinstatement and full back wages. In ruling that the dismissal should be upheld, the Court
majority has virtually rendered nugatory the employee’s right to due process as mandated by law and
the Constitution. It implicitly allows the employer to simply ignore such right and to just pay the
employee. While it increases the payment to “full back wages,” it doctrinally denigrates his right to due
process to a mere statutory right to notice.
Same; Same; Two essential requisites for an employer’s valid termination of an employee’s services;
Where there has been no just or authorized cause, the employee is awarded reinstatement or
separation pay and backwages.—In the past, this Court has untiringly reiterated that there are two
essential requisites for an employer’s valid termination of an employee’s services: (1) a just or
authorized cause and (2) due process. During the last ten years, the Court has been quite firm in this
doctrinal concept, but it has been less than consistent in declaring the illegality of a dismissal when due
process has not been observed. This is particularly noticeable in the relief granted. Where there has
been no just or authorized cause, the employee is awarded reinstatement or separation pay, and back
wages. If only the second requisite (due process) has not been fulfilled, the employee, as earlier stated,
is granted indemnity or damages amounting to a measly P1,000 up to P10,000.
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Same; Same; Illegal dismissal results not only from the absence of a legal cause, but likewise from the
failure to observe due process.—I respectfully submit that illegal dismissal results not only from the
absence of a legal cause (enumerated in Arts. 282 to 284 of the Labor Code), but likewise from the
failure to observe due process. Indeed, many are the cases, labor or otherwise, in which acts violative of
due process are unequivocally voided or declared illegal by the Supreme Court. In Pepsi-Cola Bottling Co.
v. NLRC, the Court categorically ruled that the failure of management to comply with the requirements
of due process made its judgment of dismissal “void and non-existent.”
Same; Same; Due Process; Denial of a person’s fundamental right to due process amounts to the
illegality of the proceedings against him.—Clearly deducible from our extant jurisprudence is that the
denial of a person’s fundamental right to due process amounts to the illegality of the proceedings
against him. Consequently, he is brought back to his status quo ante, not merely awarded nominal
(damages or indemnity.
Same; Same; Same; The twin requirements of notice and hearing constitute the essential elements of
due process.—In a long line of cases involving judicial, quasi-judicial and administrative proceedings,
some of which I summarized earlier, the Court has held that the twin requirements of notice and
hearing (or, at the very least, an opportunity to be heard) constitute the essential elements of due
process. In labor proceedings, both are the conditio sine qua non for a dismissal to be validly effected.
The perceptive Justice Irene Cortes has aptly stated: “One cannot go without the other, for otherwise
the termination would, in the eyes of the law, be illegal.”—
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
The facts are stated in the opinion of the Court.
Buenaluz, Urbano Law Office for petitioner.
Romeo Batino for private respondent.
MENDOZA, J.:
This is a petition seeking review of the resolutions, dated March 30, 1994 and August 26, 1994, of the
National Labor
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Relations Commission (NLRC) which reversed the decision of the Labor Arbiter and dismissed petitioner
Ruben Serrano’s complaint for illegal dismissal and denied his motion for reconsideration. The facts are
as follows:
Petitioner was hired by private respondent Isetann Department Store as a security checker to
apprehend shoplifters and prevent pilferage of merchandise.1 Initially hired on October 4, 1984 on
contractual basis, petitioner eventually became a regular employee on April 4, 1985. In 1988, he became
head of the Security Checkers Section of private respondent.2 Sometime in 1991, as a cost-cutting
measure, private respondent decided to phase out its entire security section and engage the services of
an independent security agency. For this reason, it wrote petitioner the following memorandum:3
October 11, 1991
MR. RUBEN SERRANO
PRESENT
Dear Mr. Serrano,
In view of the retrenchment program of the company, we hereby reiterate our verbal notice to you of
your termination as Security Section Head effecive October 11, 1991. Please secure your clearance from
this office.
Very truly yours,
[Sgd.] TERESITA A. VILLANUEVA
Human Resources Division Manager

The loss of his employment prompted petitioner to file a complaint on December 3, 1991 for illegal
dismissal, illegal layoff, unfair labor practice, underpayment of wages, and nonpayment of salary and
overtime pay.4
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1 TSN of testimony of petitioner, pp. 24, 76-78, April 24, 1992.
2 Petitioner’s Position Paper, Annex C; Records, p. 19.
3 Id., AnnexB; id., p. 21.
4 Records, p. 2.
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The parties were required to submit their position papers, on the basis of which the Labor Arbiter
defined the issues as follows:5
Whether or not there is a valid ground for the dismissal of the complainant.
Whether or not complainant is entitled to his monetary claims for underpayment of wages, nonpayment
of salaries, 13th month pay for 1991 and overtime pay.
Whether or not Respondent is guilty of unfair labor practice.
Thereafter, the case was heard. On April 30, 1993, the Labor Arbiter rendered a decision finding
petitioner to have been illegally dismissed. He ruled that private respondent failed to establish that it
had retrenched its security section to prevent or minimize losses to its business; that private respondent
failed to accord due process to petitioner; that private respondent failed to use reasonable standards in
selecting employees whose employment would be terminated; that private respondent had not shown
that petitioner and other employees in the security section were so inefficient so as to justify their
replacement by a security agency, or that “cost-saving devices [such as] secret video cameras (to
monitor and prevent shoplifting) and secret code tags on the merchandise” could not have been
employed; instead, the day after petitioner’s dismissal, private respondent employed a safety and
security supervisor with duties and functions similar to those of petitioner.
Accordingly, the Labor Arbiter ordered:6
WHEREFORE, above premises considered, judgment is hereby decreed:
(a)Finding the dismissal of the complainant to be illegal and concomitantly, Respondent is ordered to
pay complainant full backwages without qualification or deduction in the amount of P74,740.00
________________
5 Decision, dated April 30, 1993 of Labor Arbiter Pablo C. Espiritu. Petition, Annex A; Rollo, p. 30.
6 Id., pp. 35-36.
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from the time of his dismissal until reinstatement (computed till promulgation only) based on his
monthly salary of P4,040.00/month at the time of his termination but limited to (3) three years;
(b)Ordering the Respondent to immediately reinstate the complainant to his former position as security
section head or to a reasonably equivalent supervisorial position in charges of security without loss of
seniority rights, privileges and benefits. This order is immediately executory even pending appeal;
(c)Ordering the Respondent to pay complainant unpaid wages in the amount of P2,020.73 and
proportionate 13th month pay in the amount of P3,198.30;
(d)Ordering the Respondent to pay complainant the amount of P7,995.91, representing 10% attorney’s
fees based on the total judgment award of P79,959.12.
All other claims of the complainant whether monetary or otherwise is hereby dismissed for lack of
merit.
SO ORDERED.
Private respondent appealed to the NLRC which, in its resolution of March 30, 1994, reversed the
decision of the Labor Arbiter and ordered petitioner to be given separation pay equivalent to one month
pay for every year of service, unpaid salary, and proportionate 13th month pay. Petitioner filed a motion
for reconsideration, but his motion was denied.
The NLRC held that the phase-out of private respondent’s security section and the hiring of an
independent security agency constituted an exercise by private respondent of “[a] legitimate business
decision whose wisdom we do not intend to inquire into and for which we cannot substitute our
judgment”; that the distinction made by the Labor Arbiter between “retrenchment” and the
employment of “cost-saving devices” under Art. 283 of the Labor Code was insignificant because the
company official who wrote the dismissal letter apparently used the term “retrenchment” in its “plain
and ordinary sense: to layoff or remove from one’s job, regardless of the reason therefor”; that the rule
of “reasonable criteria” in the selection of the employees to be retrenched did not apply because all
positions in the security section had been abolished; and that the appointment of a safety and security
su-
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pervisor referred to by petitioner to prove bad faith on private respondent’s part was of no moment
because the position had long been in existence and was separate from petitioner’s position as head of
the Security Checkers Section.
Hence this petition. Petitioner raises the following issue:
IS THE HIRING OF AN INDEPENDENT SECURITY AGENCY BY THE PRIVATE RESPONDENT TO REPLACE ITS
CURRENT SECURITY SECTION A VALID GROUND FOR THE DISMISSAL OF THE EMPLOYEES CLASSED
UNDER THE LATTER?7
Petitioner contends that abolition of private respondent’s Security Checkers Section and the
employment of an independent security agency do not fall under any of the authorized causes for
dismissal under Art. 283 of the Labor Code.
Petitioner Laid Off for Cause
Petitioner’s contention has no merit. Art. 283 provides:
Closure of establishment and reduction of personnel.The employer may also terminate the employment
of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operations of the establishment or undertaking unless the closing is
for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers
and the Department of Labor and Employment at least one (1) month before the intended date thereof.
In case of termination due to the installation of labor-saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay equivalent to at least one (1) month pay or to at least one
(1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses
and in cases of closure or cessation of operations of establishment or undertaking not due to serious
business losses or financial reverses, the separation pay shall be equivalent to at least one (1) month pay
or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least
six (6) months shall be considered as one (1) whole year.
________________
7 Petition, p. 10; id., p. 16.
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In De Ocampo v. National Labor Relations Commission,8 this Court upheld the termination of
employment of three mechanics in a transportation company and their replacement by a company
rendering maintenance and repair services. It held:
In contracting the services of Gemac Machineries, as part of the company’s cost-saving program, the
services rendered by the mechanics became redundant and superfluous, and therefore properly
terminable. The company merely exercised its business judgment or management prerogative. And in
the absence of any proof that the management abused its discretion or acted in a malicious or arbitrary
manner, the court will not interfere with the exercise of such prerogative.9
In Asian Alcohol Corporation v. National Labor Relations Commission,10 the Court likewise upheld the
termination of employment of water pump tenders and their replacement by independent contractors.
It ruled that an employer’s good faith in implementing a redundancy program is not necessarily put in
doubt by the availment of the services of an independent contractor to replace the services of the
terminated employees to promote economy and efficiency.
Indeed, as we pointed out in another case, the “[management of a company] cannot be denied the
faculty of promoting efficiency and attaining economy by a study of what units are essential for its
operation. To it belongs the ultimate determination of whether services should be performed by its
personnel or contracted to outside agencies . . . [While there] should be mutual consultation, eventually
deference is to be paid to what management decides.”11 Consequently, absent proof that management
acted in a malicious or arbitrary manner, the
________________
8 213 SCRA 652 (1992).
9 Id., at 662.
10 G.R. No. 131108, March 25, 1999, 305 SCRA 416.
11 Shell Oil Workers Union v. Shell Company of the Philippines, Ltd., 39 SCRA 276, 284-285 (1971).
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VOL. 323, JANUARY 27, 2000
461
Court will not interfere with the exercise of judgment by an employer.12
In the case at bar, we have only the bare assertion of petitioner that, in abolishing the security section,
private respondent’s real purpose was to avoid payment to the security checkers of the wage increases
provided in the collective bargaining agreement approved in 1990.13 Such an assertion is not a sufficient
basis for concluding that the termination of petitioner’s employment was not a bona fide decision of
management to obtain reasonable return from its investment, which is a right guaranteed to employers
under the Constitution.14 Indeed, that the phase-out of the security section constituted a “legitimate
business decision” is a factual finding of an administrative agency which must be accorded respect and
even finality by this Court since nothing can be found in the record which fairly detracts from such
finding.15 Accordingly, we hold that the termination of petitioner’s
services was for an authorized cause, i.e., redundancy. Hence, pursuant to Art. 283 of the Labor Code,
petitioner should be given separation pay at the rate of one month pay for every year of service.
Sanctions for Violations of the Notice Requirement
Art. 283 also provides that to terminate the employment of an employee for any of the authorized
causes the employer must serve “a written notice on the workers and the Department of Labor and
Employment at least one (1) month before the intended date thereof.” In the case at bar, petitioner was
given a notice of termination on October 11, 1991. On the
________________
12 Asian Alcohol Corporation v. National Labor Relations Commission, G.R. No. 131108, March 25, 1999,
305 SCRA 416.
13 TSN, p. 61, April 24, 1992.
14 CONST., ART. XIII, §3.
15 E.g., Aurora Land Projects Corporation v. NLRC, 266 SCRA 48 (1997).
462
462
same day, his services were terminated. He was thus denied his right to be given written notice before
the termination of his employment, and the question is the appropriate sanction for the violation of
petitioner’s right.
To be sure, this is not the first time this question has arisen. In Sebuguero v. NLRC,16 workers in a
garment factory were temporarily laid off due to the cancellation of orders and a garment embargo. The
Labor Arbiter found that the workers had been illegally dismissed and ordered the company to pay
separation pay and backwages. The NLRC, on the other hand, found that this was a case of
retrenchment due to business losses and ordered the payment of separation pay without backwages.
This Court sustained the NLRC’s finding. However, as the company did not comply with the 30-day
written notice in Art. 283 of the Labor Code, the Court ordered the employer to pay the workers
P2,000.00 each as indemnity.
The decision followed the ruling in several cases involving dismissals which, although based on any of
the just causes under Art. 282,17 were effected without notice and hearing to
________________
16 248 SCRA 532 (1995).
17 This provision reads: Termination by employer.An employer may terminate an employment for any
of the following causes:
(a)Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work;
(b)Gross and habitual neglect by the employee of his duties;
(c)Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
(d)Commission of a crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representative; and
(e)Other causes analogous to the foregoing.
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463

the employee as required by the implementing rules.18 As this Court said: “It is now settled that where
the dismissal of one employee is in fact for a just and valid cause and is so proven to be but he is not
accorded his right to due process, i.e., he was not furnished the twin requirements of notice and
opportunity to be heard, the dismissal shall be upheld but the employer must be sanctioned for non-
compliance with the requirements of, or for failure to observe, due process.”19
________________
18 Bk. VI, Rule 1, of the Omnibus Rules and Regulations to Implement the Labor Code provides in
pertinent parts:
Section 2. Security of tenure . . . .
(d)In all cases of termination of employment, the following standards of due process shall be
substantially observed:
For termination of employment based on just causes as defined in Article 282 of the Labor Code:
(i)A written notice served on the employee specifying the ground or grounds for termination, and giving
said employee reasonable opportunity within which to explain his side.
(ii)A hearing or conference during which the employee concerned, with the assistance of counsel if he so
desires, is given opportunity to respond to the charge, present his evidence, or rebut the evidence
presented against him.
(iii)A written notice of termination served on the employee, indicating that upon due consideration of all
the circumstances, grounds have been established to justify his termination.
For termination of employment as defined in Article 283 of the Labor Code, the requirement of due
process shall be deemed complied with upon service of a written notice to the employee and the
appropriate Regional Office of the Department of Labor and Employment at least thirty days before
effectivity of the termination, specifying the ground or grounds for termination. . . .
19 Sebuguero v. NLRC, 248 SCRA at 547.
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464

The rule reversed a long standing policy theretofore followed that even though the dismissal is based on
a just cause or the termination of employment is for an authorized cause, the dismissal or termination is
illegal if effected without notice to the employee. The shift in doctrine took place in 1989 in Wenphil
Corp. v. NLRC.20 In announcing the change, this Court said:21
The Court holds that the policy of ordering the reinstatement to the service of an employee without loss
of seniority and the payment of his wages during the period of his separation until his actual
reinstatement but not exceeding three (3) years without qualification or deduction, when it appears he
was not afforded due process, although his dismissal was found to be for just and authorized cause in an
appropriate proceeding in the Ministry of Labor and Employment, should be re-examined. It will be
highly prejudicial to the interests of the employer to impose on him the services of an employee who
has been shown to be guilty of the charges that warranted his dismissal from employment. Indeed, it
will demoralize the rank and file if the undeserving, if not undesirable, remains in the service.
...
However, the petitioner must nevertheless be held to account for failure to extend to private
respondent his right to an investigation before causing his dismissal. The rule is explicit as above
discussed. The dismissal of an employee must be for just or authorized cause and after due process.
Petitioner committed an infraction of the second requirement. Thus, it must be imposed a sanction for
its failure to give a formal notice and conduct an investigation as required by law before dismissing
petitioner from employment. Considering the circumstances of this case petitioner must indemnify the
private respondent the amount of P1,000.00. The measure of this award depends on the facts of each
case and the gravity of the omission committed by the employer.
________________
20 170 SCRA 69 (1989).
21 Id., at 75-76.
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465
The fines imposed for violations of the notice requirement have varied from P1,000.0022 to P2,000.0023
to P5,000.0024 to P10,000.00.25
Need for Reexamining the Wenphil Doctrine
Today, we once again consider the question of appropriate sanctions for violations of the notice
requirement in light of our experience during the last decade or so with the Wenphil doctrine. The
number of cases involving dismissals without the requisite notice to the employee, although effected for
just or authorized causes, suggests that the imposition of fine for violation of the notice requirement has
not been effective in deterring violations of the notice requirement. Justice Panganiban finds the
monetary sanctions “too insignificant, too niggardly, and sometimes even too late.” On the other hand,
Justice Puno says there has in effect been fostered a policy of “dismiss now, pay later” which moneyed
employers find more convenient to comply with than the requirement to serve a 30-day written notice
(in the case of termination of employment for an authorized cause under Arts. 283-284) or to give notice
and hearing (in the case of dismissals for just causes under Art. 282).
For this reason, they regard any dismissal or layoff without the requisite notice to be null and void even
though there are just or authorized causes for such dismissal or layoff. Conse-
_______________
22 E.g., Aurelio v. NLRC, 221 SCRA 432 (1993) (dismissal of a managerial employee for breach of trust);
Rubberworld (Phils.), Inc. v. NLRC, 183 SCRA 421 (1990) (dismissal for absenteeism, leaving the work
place without notice, tampering with machines); Shoemart, Inc. v. NLRC, 176 SCRA 385 (1989) (dismissal
for abandonment of work).
23 Sebuguero v. NLRC, 248 SCRA 536 (1995) (termination of employment due to retrenchment).
24 E.g., Worldwide Papermills, Inc. v. NLRC, 244 SCRA 125 (1995) (dismissal for gross and habitual
neglect of duties).
25 E.g., Reta v. NLRC, 232 SCRA 613 (1994) (dismissal for negligence and insubordination).
466
466
quently, in their view, the employee concerned should be reinstated and paid backwages.
Validity of Petitioner’s Layoff Not Affected by Lack of Notice
We agree with our esteemed colleagues, Justices Puno and Panganiban, that we should rethink the
sanction of fine for an employer’s disregard of the notice requirement. We do not agree, however, that
disregard of this requirement by an employer renders the dismissal or termination of employment null
and void. Such a stance is actually a reversion to the discredited pre-Wenphil rule of ordering an
employee to be reinstated and paid backwages when it is shown that he has not been given notice and
hearing although his dismissal or layoff is later found to be for a just or authorized cause. Such rule was
abandoned in Wenphil because it is really unjust to require an employer to keep in his service one who
is guilty, for example, of an attempt on the life of the employer or the latter’s family, or when the
employer is precisely retrenching in order to prevent losses.
The need is for a rule which, while recognizing the employee’s right to notice before he is dismissed or
laid off, at the same time acknowledges the right of the employer to dismiss for any of the just causes
enumerated in Art. 282 or to terminate employment for any of the authorized causes mentioned in Arts.
283-284. If the Wenphil rule imposing a fine on an employer who is found to have dismissed an
employee for cause without prior notice is deemed ineffective in deterring employer violations of the
notice requirement, the remedy is not to declare the dismissal void if there are just or valid grounds for
such dismissal or if the termination is for an authorized cause. That would be to uphold the right of the
employee but deny the right of the employer to dismiss for cause. Rather, the remedy is to order the
payment to the employee of full backwages from the time of his dismissal until the court finds that the
dismissal was for a just cause. But,
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467
otherwise, his dismissal must be upheld and he should not be reinstated. This is because his dismissal is
ineffectual.
For the same reason, if an employee is laid off for any of the causes in Arts. 283-284, i.e., installation of a
labor-saving device, but the employer did not give him and the DOLE a 30-day written notice of
termination in advance, then the termination of his employment should be considered ineffectual and
he should be paid backwages. However, the termination of his employment should not be considered
void but he should simply be paid separation pay as provided in Art. 283 in addition to backwages.
Justice Puno argues that an employer’s failure to comply with the notice requirement constitutes a
denial of the employee’s right to due process. Prescinding from this premise, he quotes the statement of
Chief Justice Concepcion in Vda. de Cuaycong v. Vda. de Sengbengco26 that “acts of Congress, as well as
of the Executive, can deny due process only under the pain of nullity, and judicial proceedings suffering
from the same flaw are subject to the same sanction, any statutory provision to the contrary
notwithstanding.” Justice Puno concludes that the dismissal of an employee without notice and hearing,
even if for a just cause, as provided in Art. 282, or for an authorized cause, as provided in Arts. 283-284,
is a nullity. Hence, even if just or authorized causes exist, the employee should be reinstated with full
back pay. On the other hand, Justice Panganiban quotes from the statement in People v. Bocar27 that
“[w]here the denial of the fundamental right of due process is apparent, a decision rendered in
disregard of that right is void for lack of jurisdiction.”
Violation of Notice Requirement Not a Denial of Due Process
The cases cited by both Justice Puno and Panganiban refer, however, to the denial due process by the
State, which is not
________________
26 110 Phil. 113, 118 (1960).
27 138 SCRA 166, 170 (1985).
468
468
the case here. There are three reasons why, on the other hand, violation by the employer of the notice
requirement cannot be considered a denial of due process resulting in the nullity of the employee’s
dismissal or layoff.
The first is that the Due Process Clause of the Constitution is a limitation on governmental powers. It
does not apply to the exercise of private power, such as the termination of employment under the labor
Code. This is plain from the text of Art. III, §1 of the Constitution, viz.: “No person shall be deprived of
life, liberty, or property without due process of law . . . .” The reason is simple: Only the State has
authority to take the life, liberty, or property of the individual. The purpose of the Due Process Clause is
to ensure that the exercise of this power is consistent with what are considered civilized methods.
The second reason is that notice and hearing are required under the Due Process Clause before the
power of organized society are brought to bear upon the individual. This is obviously not the case of
termination of employment under Art. 283. Here the employee is not faced with an aspect of the
adversary system. The purpose for requiring a 30-day written notice before an employee is laid off is not
to afford him an opportunity to be heard on any charge against him, for there is none. The purpose
rather is to-give him time to prepare for the eventual loss of his job and the DOLE an opportunity to
determine whether economic causes do exist justifying the termination of his employment.
Even in cases of dismissal under Art. 282, the purpose for the requirement of notice and hearing is not
to comply with Due Process Clause of the Constitution. The time for notice and hearing is at the trial
stage. Then that is the time we speak of notice and hearing as the essence of procedural due process.
Thus, compliance by the employer with the notice requirement before he dismisses an employee does
not foreclose the right of the latter to question the legality of his dismissal. As Art. 277(b) provides, “Any
decision taken by the employer shall be without prejudice to the right of the worker to contest the
validity or legality of his dismissal by filing a
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469
complaint with the regional branch of the National Labor Relations Commission.”
Indeed, to contend that the notice requirement in the Labor Code is an aspect of due process is to
overlook the fact that Art. 283 had its origin in Art. 302 of the Spanish Code of Commerce of 1882 which
gave either party to the employer-employee relationship the right to terminate their relationship by
giving notice to the other one month in advance. In lieu of notice, an employee could be laid off by
paying him a mesada equivalent to his salary for one month.28 This provision was repealed by Art. 2270
of the Civil Code, which took effect on August 30, 1950. But on June 12, 1954, R.A. No. 1052, otherwise
known as the Termination Pay Law, was enacted reviving the mesada. On June 21, 1957, the law was
amended by R.A. No. 1787 providing for the giving of advance notice or the payment of compensation at
the rate of one-half month for every year of service.29
_______________
28 ART. 302 of the Code of Commerce provided:

In cases in which no special time is fixed in the contracts of service, any one of the parties thereto may
dissolve it, advising the other party thereof one month in advance.
The factory or shop clerk shall be entitled, in such case, to the salary due for said month.
29 R.A. No. 1052, as amended by R.A. No. 1787, provided:
SECTION 1. In cases of employment without a definite period, in a commercial, industrial, or agricultural

establishment or enterprise, the employer or the employee may terminate at any time the employment
with just cause, or without just cause in the case of an employee by serving written notice on the
employer at least one month in advance, or in the case of an employer, by serving such notice to the
employee at least one month in advance or one-half month for every year of service of the employee,
whichever is longer, a fraction of at least months being considered as one whole year.
The employer, upon whom no such notice was served in case of termination of employment without
just cause may hold the employee liable for damages.
470
470
The Termination Pay Law was held not to be a substantive law but a regulatory measure, the purpose of
which was to give the employer the opportunity to find a replacement or substitute, and the employee
the equal opportunity to look for another job or source of employment. Where the termination of
employment was for a just cause, no notice was required to be given to the employee.30 It was only on
September 4, 1981 that notice was required to be given even where the dismissal or termination of an
employee was for cause. This was made in the rules issued by the then Minister of Labor and
Employment to implement B.P. Blg. 130 which amended the Labor Code. And it was still much later
when the notice requirement was embodied in the law with the amendment of Art. 277(b) by R.A. No.
6715 on March 2, 1989. It cannot be that the former regime denied due process to the employee.
Otherwise, there should now likewise be a rule that, in case an employee leaves his job without cause
and without prior notice to his employer, his act should be void instead of simply making him liable for
damages.
The third reason why the notice requirement under Art. 283 cannot be considered a requirement of the
Due Process Clause is that the employer cannot really be expected to be entirely an impartial judge of
his own cause. This is also the case in termination of employment for a just cause under Art. 282 (i.e.,
serious misconduct or willful disobedience by the employee of the lawful orders of the employer, gross
and habitual neglect of duties, fraud or willful breach of trust of the employer, commission of crime
against the employer or the latter’s immediate family or duly authorized representatives, or other
analogous cases).
_________________
The employee, upon whom no such notice was served in case of termination of employment without
just cause shall be entitled to compensation from the date of termination of his employment in an
amount equivalent to his salaries or wages corresponding to the required period of notice.
30 Abe v. Foster Wheeler Corp., 110 Phil. 198 (1960); Malate Taxicab and Garage, Inc. v. CIR, 99 Phil. 41
(1956)
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471
Justice Puno disputes this. He says that “statistics in the DOLE will prove that many cases have been won
by employees before the grievance committees manned by impartial judges of the company.” The
grievance machinery is, however, different because it is established by agreement of the employer and
the employees and composed of representatives from both sides. That is why, in Batangas Laguna
Tayabas Bus Co. v. Court of Appeals,31 which Justice Puno cites, it was held that “Since the right of [an
employee] to his labor is in itself a property and that the labor agreement between him and [his
employer] is the law between the parties, his summary and arbitrary dismissal amounted to deprivation
of his property without due process of law.” But here wef are dealing with dismissals and layoffs by
employers alone, without the intervention of any grievance machinery. Accordingly in Montemayor v.
Araneta University Foundation,32 although a professor was dismissed without a hearing by his
university, his dismissal for having made homosexual advances on a student was sustained, it appearing
that in the NLRC, the employee was fully heard in his defense.
Lack of Notice Only Makes Termination Ineffectual
Not all notice requirements are requirements of due process. Some are simply part of a procedure to be
followed before a right granted to a party can be exercised. Others are simply an application of the
Justinian precept, embodied in the Civil Code,33 to act with justice, give everyone his due, and observe
honesty and good faith toward one’s fellowmen. Such is the notice requirement in Arts. 282-283. The
consequence of the failure either of the employer or the employee to live up to this precept is to make
him liable in damages, not to render his act (dismissal or resignation, as the case may be) void. The
measure of damages is the amount of wages the employee
________________
31 71 SCRA 470, 480 (1976).
32 77 SCRA 321 (1977).
33 CIVIL CODE, ART. 19.
472
472
should have received were it not for the termination of his employment without prior notice. If
warranted, nominal and moral damages may also be awarded.
We hold, therefore, that, with respect to Art. 283 of the Labor Code, the employer’s failure to comply
with the notice requirement does not constitute a denial of due process but a mere failure to observe a
procedure for the termination of employment which makes the termination of employment merely
ineffectual. It is similar to the failure to observe the provisions of Art. 1592, in relation to Art. 1191, of
the Civil Code34 in rescinding a contract for the sale of immovable property. Under these provisions,
while the power of a party to rescind a contract is implied in reciprocal obligations, nonetheless, in cases
involving the sale of immovable property, the vendor cannot exercise this power even though the
vendee defaults in the payment of the price, except by bringing an action in court or giving notice of
rescission by means of a notarial demand.35 Consequently, a notice of rescission given in the letter of an
attorney has no legal effect, and the vendee can make payment even after the due date since no valid
notice of rescission has been given.36
Indeed, under the Labor Code, only the absence of a just cause for the termination of employment can
make the dis-
________________
34 ART. 1191: “The power to rescind obligations is implied in reciprocal ones, in case one of the obligors
should not comply with what is incumbent upon him . . . .”
ART. 1592: “In the sale of immovable property, even though it may have been stipulated that upon
failure to pay the price at the time agreed upon the rescission of the contract shall of right take place,
the vendee may pay, even after the expiration of the period, as long as no demand for rescission of the
contract has been made upon him either judicially or by a notarial act. After the demand, the court may
not grant him a new term.”
35 De la Cruz v. Legaspi, 98 Phil. 43 (1955); Taguba v. Vda. de Leon, 132 SCRA 722 (1984).
36 See Maximo v. Fabian, G.R. No. L-8015, December 23, 1955, (unpub.), 98 Phil. 989.
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473
missal of an employee illegal. This is clear from Art. 279 which provides:
Security of Tenure.—In cases of regular employment, the employer shall not terminate the services of
an employee except for a just cause or when authorized by this Title. An employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the time of his
actual reinstatement.37
Thus, only if the termination of employment is not for any of the causes provided by law is it illegal and,
therefore, the employee should be reinstated and paid backwages. To contend, as Justices Puno and
Panganiban do, that even if the termination is for a just or authorized cause the employee concerned
should be reinstated and paid backwages would be to amend Art. 279 by adding another ground for
considering a dismissal illegal. What is more, it would ignore the fact that under Art. 285, if it is the
employee who fails to give a written notice to the employer that he is leaving the service of the latter, at
least one month in advance, his failure to comply with the legal requirement does not result in making
his resignation void but only in making him liable for damages.38
_________________
37 Emphasis added.
38 ART. 285 reads:
Termination by employee.(a) An employee may terminate without just cause the employee-employer
relationship by serving a written notice on the employer at least one (1) month in advance. The
employer upon whom no such notice was served may hold the employee liable for damages.
(b) An employee may put an end to the relationship without serving any notice on the employer for any
of the following just causes:
1.Serious insult by the employer or his representative on the honor and person of the employee;
2.Inhuman and unbearable treatment accorded the employee by the employer or his representative;
474
474
This disparity in legal treatment, which would result from the adoption of the theory of the minority
cannot simply be explained by invoking President Ramon Magsaysay’s motto that “he who has less in life
should have more in law.”—That would be a misapplication of this noble phrase originally from
Professor Thomas Reed Powell of the Harvard Law School.
Justice Panganiban cites Pepsi-Cola Bottling Co. v. NLRC,39 in support of his view that an illegal dismissal
results not only from want of legal cause but also from the failure to observe “due process.’’ The Pepsi-
Cola case actually involved a dismissal for an alleged loss of trust and confidence which, as found by the
Court, was not proven. The dismissal was, therefore, illegal, not because there was a denial of due
process, but because the dismissal was without cause. The statement that the failure of management to
comply with the notice requirement “taints the dismissal with illegality”—was merely a dictum thrown
in as additional grounds for holding the dismissal to be illegal.
Given the nature of the violation, therefore, the appropriate sanction for the failure to give notice is the
payment of backwages for the period when the employee is considered not to have been effectively
dismissed or his employment terminated. The sanction is not the payment alone of nominal damages as
Justice Vitug contends.
The refusal to look beyond the validity of the initial action taken by the employer to terminate
employment either for an authorized or just cause can result in an injustice to the employer. For not
giving notice and hearing before dismissing an employee, who is otherwise guilty of, say, theft, or even
of an
________________
3.Commission of a crime or offense by the employer or his representative against the person of the
employee or any of the immediate members of his family; and
4.Other causes analogous to any of the foregoing.
39 210 SCRA 277 (1992).
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475
attempt against the life of the employer, an employer will be forced to keep in his employ such guilty
employee. This is unjust.
It is true the Constitution regards labor as “a primary social economic force.”40 But so does it declare
that it “recognizes the indispensable role of the private sector, encourages private enterprise, and
provides incentives to needed investment.”41 The Constitution bids the State to “afford full protection
to labor.”42 But it is equally true that “the law, in protecting the rights of the laborer, authorizes neither
oppression nor self-destruction of the employer.”43 And it is oppression to compel the employer to
continue in employment one who is guilty or to force the employer to remain in operation when it is not
economically in his interest to do so.
In sum, we hold that if in proceedings for reinstatement under Art. 283, it is shown that the termination
of employment was due to an authorized cause, then the employee concerned should not be ordered
reinstated even though there is failure to comply with the 30-day notice requirement. Instead, he must
be granted separation pay in accordance with Art. 283, to wit:
In case of termination due to the installation of labor-saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least
one month for every year of service, whichever is higher. In case of retrenchment to prevent losses and
in cases of closures or cessation of operations of establishment or undertaking not due to serious
business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at
least one-half (1/2)
________________
40 Art. II, §18.
41 Id., §20.
42 Art. XIII, §3.
43 Manila Trading and Supply Co. v. Zulueta, 69 Phil. 485, 487 (1940) (per Laurel, J.) Accord, Villanueva v.
NLRC, 293 SCRA 259 (1998); DI Security and General Services, Inc. v. NLRC, 264 SCRA 458 (1996); Flores
v. NLRC, 256 SCRA, 735 (1996); San Miguel Corporation v. NLRC, 218 SCRA 293 (1993); Colgate Palmolive
Philippines, Inc. v. Ople, 163 SCRA 323 (1988).
476
476
month pay for every year of service, whichever is higher. A fraction of at least six months shall be
considered one (1) whole year.
If the employee’s separation is without cause, instead of being given separation pay, he should be
reinstated. In either case, whether he is reinstated or only granted separation pay, he should be paid full
backwages if he has been laid off without written notice at least 30 days in advance. On the other hand,
with respect to dismissals for cause under Art. 282, if it is shown that the employee was dismissed for
any of the just causes mentioned in said Art. 282, then, in accordance with that article, he should not be
reinstated. However, he must be paid backwages from the time his employment was terminated until it
is determined that the termination of employment is for a just cause because the failure to hear him
before he is dismissed renders the termination of his employment without legal effect.
WHEREFORE, the petition is GRANTED and the resolution of the National Labor Relations Commission is
MODIFIED by ordering private respondent Isetann Department Store, Inc. to pay petitioner separation
pay equivalent to one (1) month pay for every year of service, his unpaid salary, and his proportionate
13th month pay and, in addition, full backwages from the time his employment was terminated on
October 11, 1991 up to the time the decision herein becomes final. For this purpose, this case is
REMANDED to the Labor Arbiter for computation of the separation pay, backwages, and other monetary
awards to petitioner.
SO ORDERED.
Davide, Jr. (C.J.), Melo, Kapunan, Quisumbing, Purisima, Pardo, Buena, Gonzaga-Reyes and De Leon,
Jr., JJ., concur.
Bellosillo, J., Please see separate opinion.
Puno, J., Please see dissenting opinion.
Vitug, J., Please see Separate Opinion.
Panganiban, J., Please see Separate Opinion.
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477
Ynares-Santiago, J., I join the dissenting opinion of J. Puno.
SEPARATE OPINION
BELLOSILLO, J.:
We point out at the outset that this Petition for Review, which was filed before the promulgation of St.
Martin Funeral Home v. National Labor Relations Commission,1 is not the proper means by which NLRC
decisions are appealed to this Court. Before St. Martin Funeral Home, it was only through a Petition for
Certiorari under Rule 65 that NLRC decisions could be reviewed and nullified by us on the ground of lack
of jurisdiction or grave abuse of discretion amounting to lack or excess of jurisdiction. After St. Martin
Funeral Home, petitions like the one at bar are initially filed in the Court of Ap-peals for proper
adjudication.
In the interest of justice, however, and in order to write finis to the instant case which has already
dragged on for so long, we shall treat the petition pro hac vice as one for certio-rari under Rule 65
although it is captioned Petition for Review on Certiorari’, after all, it was filed within the reglementary
period for the filing of a petition for certiorari under Rule 65.
Briefly, on 4 April 1985 private respondent Isetann Department Store, Inc. (ISETANN), employed
petitioner Ruben Serrano as Security Checker until his appointment as Security Section Head. On 11
October 1991 ISETANN through its Human Resource Division Manager Teresita A. Villanueva sent
Serrano a memorandum terminating his employment effective immediately “in view of the
retrenchment program of the company,” and directing him to secure clearance from their office.2
Petitioner Serrano filed with the NLRC Adjudication Office a complaint for illegal dismissal and
underpayment of wages
________________
1 G.R. No. 130866, 16 September 1998, 295 SCRA 494.
2 Exh. “B,”—Records, p. 21.

478
478
against ISETANN. Efforts at amicable settlement proved futile. Ms. Cristina Ramos, Personnel
Administration Manager of ISETANN, testified that the security checkers and their section head were
retrenched due to the installation of a labor saving device, i.e., the hiring of an independent security
agency.
Finding the dismissal to be illegal, the Labor Arbiter ordered the immediate reinstatement of Serrano to
his former or to an equivalent position plus payment of back wages, unpaid wages, 13th month pay and
attorney’s fees.
On appeal the NLRC reversed the Labor Arbiter and ruled that ISETANN acted within its prerogative
when it phased out its Security Section and retained the services of an independent security agency in
order to cut costs and economize.
Upon denial of his motion for reconsideration3 Serrano filed the instant petition imputing grave abuse
of discretion on the part of the NLRC.
Article 282 of the Labor Code enumerates the just causes for the termination of employment by the
employer: (a) serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or the latter’s representative in connection with the employee’s work, (b) gross and habitual
neglect by the employee of his duties; (c) fraud or willful breach by the employee of the trust reposed in
him by his employer or his duly authorized representative; (d) commission of a crime or offense by the
employee against the person of his employer or any immediate member of his family or his duly
authorized representative; and, (e) other causes analogous to the foregoing.
On the other hand, Arts. 283 and 284 of the same Code enumerate the so-called authorized causes: (a)
installation of labor saving devices; (b) redundancy; (c) retrenchment to prevent losses; (d) closure or
cessation of the establishment or undertaking unless the closure or cessation is for the purpose of
circumventing the provisions of the law; and, (e) disease.
________________
3 Rollo, p. 63.
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479
The just causes enumerated under Art. 282 of the Labor Code are provided by the employee who causes
the infraction. The authorized causes are provided by the employer either because of outside factors
such as the general decline in the economy or merely part of its long range plan for business
profitability. Corollarily, in termination for a just cause, the employee is not entitled to separation pay
unlike in termination for an authorized cause. In addition, the basis in computing the amount of
separation pay varies depending on whether the termination is due to the installation of a labor saving
device, or redundancy, in which case, the employee is entitled to receive separation pay equivalent to at
least one (1) month pay or to at least one (1) month pay for every year of service. In case the
termination is due to retrenchment in order to prevent losses or in case of closure or cessation of
operation of the establishment or undertaking not due to serious business losses or financial reverses,
the separation pay is lower, i.e., equivalent to one (1) month pay or at least one-half month pay for
every year of service, whichever is higher. As may be gleaned from the foregoing, where the cause of
termination is for the financial advantage or benefit of the employer, the basis in computing for
separation pay is higher compared to termination dictated by necessity with no appreciable financial
advantage to the employer.
In the instant case, we agree with the NLRC that the dismissal of petitioner Serrano was for an
authorized cause, i.e., redundancy, which exists where the services of an employee are in excess of what
are reasonably demanded by the actual requirements of the enterprise. A position is redundant where it
is superfluous, and the superfluity may be the outcome of other factors such as overhiring of workers,
decreased volume of business, or dropping of a particular product line or service activity previously
manufactured or undertaken by the enterprise.4
________________
4 Sebuguero v. National Labor Relations Commission, G.R. No. 115395, 27 September 1995, 248 SCRA
536; Almodiel v. National Labor Relations Commission, G.R. No. 100641, 14 June 1993, 223 SCRA 341.
480
480
The hiring of an independent security agency is a business decision properly within the exercise of
management prerogative. As such, this Court is denied the authority to delve into its wisdom although it
is equipped with the power to determine whether the exercise of such prerogative is in accordance with
law. Consequently, the wisdom or soundness of the management decision is not subject to the
discretionary review of the Labor Arbiter nor of the NLRC unless there is a violation of law or
arbitrariness in the exercise thereof, in which case, this Court will step in.5 Specifically, we held in
International Harvester Macleod, Inc. v. Intermediate Appellate Court6 that the determination of
whether to maintain or phase out an entire department or section or to reduce personnel lies with
management. The determination of the need for the phasing out of a department as a labor and cost
saving device because it is no longer economical to retain its services is a management prerogative.
After having established that the termination of petitioner Ruben Serrano was for an authorized cause,
we now address the issue of whether proper procedures were observed in his dismissal.
Since the State affords protection to labor under the Constitution,7 workers enjoy security of tenure and
may only be removed or terminated upon valid reason and through strict observance of proper
procedure.8 Article 279 of the Labor Code specifically provides
Art. 279. Security of Tenure.—In cases of regular employment, the employer shall not terminate the
services of an employee except for a just cause or when authorized by this Title. An employee who is
unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other
privileges and to his
________________
5 De Ocampo v. National Labor Relations Commission, G.R. No. 101539, 4 September 1992, 213 SCRA
652, 662.
6 G.R. No. 73287, 18 May 1987, 149 SCRA 641.
7 Art. XIII, Sec. 3, 1987 Constitution, reiterated in Art. 3, Labor Code.
8 Art. 3, Labor Code.
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481
full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed
from the time his compensation was withheld from him up to the time of his actual reinstatement.
Security of tenure however does not guarantee perpetual employment. If there exists a just or an
authorized cause, the employer may terminate the services of an employee but subject always to
procedural requirements. The employer cannot be legally compelled to have in its employ a person
whose continued employment is patently inimical to its interest. The law, while affording protection to
the employee, does not authorize the oppression or destruction of his employer.9
Subject then to the constitutional right of workers to security of tenure and to be protected against
dismissal except for a just or authorized cause, and without prejudice to the requirement of notice
under Art. 283 of the Labor Code, the employer shall furnish the worker whose employment is sought to
be terminated a written notice containing a statement of the cause of termination and shall afford the
latter ample opportunity to be heard and to defend himself with the assistance of his representative, if
he so desires, in accordance with company rules and regulations promulgated pursuant to guidelines set
by the DOLE.10
As specifically provided in Art. 283 of the Labor Code, the employer may terminate the employment of
any employee due to redundancy by serving a written notice on the worker and the DOLE at least one
(1) month before the intended date thereof. In the instant case, ISETANN clearly violated the provisions
of Art. 283 on notice.11 It did not send a written
_________________
9 Alcantara, Samson S., Reviewer in Labor and Social Legislation, 1993 Ed., p. 347.
10 Art. 277, Labor Code.
11 Art. 283. Closure of establishment and reduction of personnel.The employer may also terminate the
employment of any employee due to the installation of labor saving devices, redundancy, retrenchment
to prevent losses or the closing or cessation of operation of the establishment or undertaking x x x by
serving a written notice on the worker and the Ministry of Labor and Employment at least one (1) month
before the intended date thereof x x x x.
482
482

notice to DOLE which is essential because the right to terminate an employee is not an absolute
prerogative. The lack of written notice denied DOLE the opportunity to determine the validity of the
termination.
The written notice ISETANN sent to Serrano was dated 11 October 1991 or on the same day the
intended termination was to take effect. This obviously did not comply with the 30-day mandatory
requirement. Although the cause for discharge may be just or authorized, it is still necessary and
obligatory to afford the employee concerned his basic and more important right to notice. Serrano was
not given the chance to make the needed adjustments brought about by his termination. Significantly,
the notice is intended to enable the employee not only to prepare himself for the legal battle to protect
his tenure of employment, which can be long, arduous, expensive and complicated by his own
standards, but also to find other means of employment and ease the impact of the loss of his job and,
necessarily, his income.
We are of the view that failure to send notice of termination to Serrano is not tantamount to violation of
his constitutional right to due process but merely constitutes noncompliance with the provision on
notice under Art. 283 of the Labor Code.
The legitimacy of a government is established and its functions delineated in the Constitution. From the
Constitution flows all the powers of government in the same manner that it sets the limits for their
proper exercise. In particular, the Bill of Rights functions primarily as a deterrent to any display of
arbitrariness on the part of the government or any of its instrumentalities. It serves as the general
safeguard, as is apparent in its first section which states, “No person shall be deprived of life, liberty or
property without due process of law, nor shall any person be denied the equal protection of the
laws.”12 Specifically, due process is a requirement for the validity of any governmental action
amounting to deprivation of
________________
12 Sec. 1, Art. III, 1987 Constitution.
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483
liberty or property.13 It is a restraint on state action not only in terms of what it amounts to but how it
is accomplished. Its range thus covers both the ends sought to be achieved by officialdom as well as the
means for their realization.14
Substantive due process is a weapon that may be utilized to challenge acts of the legislative body,
whether national or local, and presumably executive orders of the President and administrative orders
and regulations of a rule-making character. Procedural due process, on the other hand, is available for
the purpose of assailing arbitrariness or unreasonableness in the administration of the law by the
executive department or the judicial branch. Procedural due process likewise may aid those appearing
before Congressional committees if the proceedings are arbitrary or otherwise unfair.15
Procedural due process demands that governmental acts, more specifically so in the case of the
judiciary, be not infected with arbitrariness.16 The same disinterestedness required of men on the
bench must characterize the actuations of public officials, not excluding the President, to satisfy the
requirements of procedural due process.17
In his dissent Mr. Justice Puno states that “the new majority opinion limiting violations of due process to
government action alone is a throwback to a regime of law long discarded by more progressive
countries.” He opines that “today, private due process is a settled norm in administrative law,” citing
Schwartz, an authority in administrative law.
We beg to disagree. A careful reading of Schwartz would reveal that requirements of procedural due
process extended from governmental to private action only in instances where there is “sufficient
governmental involvement” or “the private action was so saturated with governmental incidents.”
________________
13 Fernando, Enrique M., The Bill of Rights, 1972, ed., p. 71.

14 Id., p. 78.
15 Id., pp. 80-81.
16 Id., p. 94.
17 Id., p. 96.
484
484
The cardinal primary requirements of due process in administrative proceedings were highlighted in Ang
Tibay v. Court of Industrial Relations:18 (a) the right to a hearing, which includes the right to present
one’s case and submit evidence in support thereof; (b) the tribunal must consider the evidence
presented; (c) the decision must have something to support itself; (d) the evidence must be substantial;
(e) the decision must be based on the evidence presented at the hearing, or at least contained in the
record and disclosed to the parties affected; (f) the tribunal or body or any of its judges must act on its
own independent consideration of the law and facts of the controversy, and not simply accept the views
of a subordinate; (g) the board or body should, in all controversial questions, render its decision in such
manner that the parties to the proceeding may know the various issues involved, and the reason for the
decision rendered.
Also in Lumiqued v. Exevea19 it was held
In administrative proceedings, the essence of due process is simply the opportunity to explain one’s
side. One may be heard, not solely by verbal presentation but also, and perhaps even more creditably as
it is more practicable than oral arguments, through pleadings. An actual hearing is not always an
indispensable aspect of due process. As long as a party was given the opportunity to defend his interests
in due course, he cannot be said to have been denied due process of law, for this opportunity to be
heard is the very essence of due process.
From the foregoing, it is clear that the observance of due process is demanded in governmental acts.
Particularly in administrative proceedings, due process starts with the tribunal or hearing officer and not
with the employer. In the instant case, what is mandated of the employer to observe is the 30-day
notice requirement. Hence, non-observance of the notice requirement is not denial of due process but
merely a failure to comply with a legal obligation for which, we
________________
18 69 Phil. 635 (1940).
19 G.R. No. 117565, 18 November 1997, 282 SCRA 146-147.
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VOL. 323, JANUARY 27, 2000
485
strongly recommend, we impose a disturbance compensation as discussed hereunder.
In the instant case, we categorically declare that Serrano was not denied his right to due process.
Instead, his employer did not comply with the 30-day notice requirement. However, while Serrano was
not given the required 30-day notice, he was nevertheless given and, in fact, took advantage of every
opportunity to be heard, first, by the Labor Arbiter, second, by the NLRC, and third, by no less than this
Court. Before the Labor Arbiter and the NLRC, petitioner had the opportunity to present his side not
only orally but likewise through proper pleadings and position papers. It is not correct therefore to say
that petitioner was deprived of his right to due process.
We have consistently upheld in the past as valid although irregular the dismissal of an employee for a
just or authorized cause but without notice and have imposed a sanction on the erring employers in the
form of damages for their failure to comply with the notice requirement. We discussed the rationale
behind this ruling in Wenphil Corporation v. NLRC20 thus
The Court holds that the policy of ordering reinstatement to the service of an employee without loss of
seniority and the payment of his wages during the period of his separation until his actual reinstatement
but not exceeding three years without qualification or deduction, when it appears he was not afforded
due process, although his dismissal was found to be for just and authorized cause in an appropriate
proceeding in the Ministry of Labor and Employment should be re-examined. It will be highly prejudicial
to the interests of the employer to impose on him the services of an employee who has been shown to
be guilty of the charges that warranted his dismissal from employment. Indeed, it will demoralize the
rank and file if the undeserving, if not undesirable, remains in the service x x x x However, the petitioner
must nevertheless be held to account for failure to extend to private respondent his right to an
investigation before causing his dismissal. The rule is explicit as above discussed. The dismissal of an
employee must be for just or authorized cause and after due process. Petitioner committed an infraction
of
________________
20 G.R. No. 80587, 8 February 1989, 170 SCRA 69.
486
486
the second requirement. Thus, it must be imposed a sanction for its failure to give a formal notice and
conduct an investigation as required by law before dismissing petitioner from employment. Considering
the circumstances of this case petitioner must indemnify private respondent the amount of P1,000.00.
The measure of this award depends on the facts of each case and the gravity of the omission committed
by the employer (italics supplied).
In Sebuguero v. National Labor Relations Commission21 Mr. Justice Davide, Jr., now Chief Justice, made
this clear pronouncement—
It is now settled that where the dismissal of an employee is in fact for a just and valid cause and is so
proven to be but he is not accorded his right to due process, i.e. he was not furnished the twin
requirements of notice and the opportunity to be heard, the dismissal shall be upheld but the employer
must be sanctioned for noncompliance with the requirements of or for failure to observe due process.
The sanction, in the nature of indemnification or penalty, depends on the facts of each case and the
gravity of the omission committed by the employer.
This ruling was later ably amplified by Mr. Justice Puno in Nath v. National Labor Relations
Commission22 where he wrote
The rules require the employer to furnish the worker sought to be dismissed with two written notices
before termination of employment can be legally effected: (1) notice which apprises the employee of
the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice which
informs the employee of the employer’s decision to dismiss him. In the instant case, private respondents
have failed to furnish petitioner with the first of the required two (2) notices and to state plainly the
reasons for the dismissal in the termination letter. Failure to comply with the requirements taints the
dismissal with illegality.
Be that as it may, private respondent can dismiss petitioner for just cause x x x x We affirm the finding of
the public respondent that
________________
22 G.R. No. 122666, 19 June 1997, 274 SCRA 379.
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487
there was just cause to dismiss petitioner, a probationary employee (italics supplied).
Also, in Camua v. National Labor Relations Commission23 this Court through Mr. Justice Mendoza
decreed
In the case at bar, both the Labor Arbiter and the NLRC found that no written notice of the charges had
been given to petitioner by the respondent company, x x x Accordingly, in accordance with the well-
settled mle, private respondents should pay petitioner P1,000.00 as indemnity for violation of his right
to due process x x x x Although an employee validly dismissed for cause he may nevertheless be given
separation pay as a measure of social justice provided the cause is not serious misconduct reflecting on
his moral character (italics supplied).
Non-observance of this procedural requirement before would cause the employer to be penalized by
way of paying damages to the employee the amounts of which fluctuated through the years. Thus, for
just cause the indemnity ranged from P1,000.00 to P10,000.00.24 For authorized cause, as dis-
________________
24 Shoemart, Inc. v. NLRC, G.R. No. 74229, 11 August 1989, 176 SCRA 385The employee was found to
have abandoned his job but for failure to observe the notice requirement, the employer was fined
P1,000.00; Pacific Mills, Inc. v. Alonzo, G.R. No. 78090, 26 July 1991, 199 SCRA 617The employee
violated company rules and regulations but because of procedural lapse the company was fined
P1,000.00; Aurelio v. NLRC, G.R. No. 99034, 12 April 1993, 221 SCRA 432The managerial employee
breached the trust and confidence of his employer but for failure to observe the notice requirement the
company was fined P1,000.00; Worldwide Papermills, Inc. v. NLRC, G.R. No. 113081, 12 May 1995, 244
SCRA 125The employee was found guilty of gross and habitual neglect of his duties and of excessive
absences. For failure to comply with the notice requirement the company was fined P5,000.00; Reta v.
NLRC, G.R. No. 112100, 27 May 1994, 232 SCRA 613—The employee was guilty of inefficiency,
negligence and insubordination but the company was fined P10,000.00 for failure to observe the notice
requirement.
488
488
tinguished from just cause, the award ranged from P2,000.00 to P5,000.00.25
This Court has also sanctioned the ruling that a dismissal for a just or authorized cause but without
observance of the mandatory 30-day notice requirement was valid although considered irregular. The
Court ratiocinated that employers should not be compelled to keep in their employ undesirable and
undeserving laborers. For the irregularity, i.e., the failure to observe the 30-day notice of termination,
the employer was made to pay a measly sum ranging from P1,000.00 to P10,000.00.
With regard to the indemnity or penalty, which we prefer seriously to be referred to as “disturbance
compensation,”—the Court has awarded varying amounts depending on the circumstances of each case
and the gravity of the commission. We now propose that the amount of the award be uniform and
rational and not arbitrary. The reason for the proposal or modification is that in their non-compliance
with the 30-day notice requirement the erring employers, regardless of the peculiar circumstances of
each case, commit the infraction only by the single act of not giving any notice to their workers. It
cannot be gainfully said that the infraction in one case is heavier than in the other as the non-
observance constitutes one single act. Thus, if the dismissal is illegal, i.e. there is no just or authorized
cause, a disturbance compensation in the amount of P10,000.00 may be considered reasonable. If the
dismissal is for a just cause but without notice, a disturbance compensation in the amount P5,000.00
may be given. In termination for an authorized cause and the notice requirement was not complied
with, we distinguish further: If it is to save
________________
25 Sebuguero v. NLRC, G.R. No. 115394, 27 September 1995, 248 SCRA 532—The employees were
retrenched in order to prevent further losses but the company failed to observe the notice requirement,
hence was fined P2,000.00 for each employee; Balbalec, et al. v. NLRC, G.R. No. 107756, 19 December
1995, 251 SCRA 398—The employees were retrenched to prevent business losses but the company was
fined P5,000.00 for each employee for failure to observe the notice requirement.
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VOL. 323, JANUARY 27, 2000
489
the employer from imminent bankruptcy or business losses, the disturbance compensation to be given
is P5,000.00. If the authorized cause was intended for the employer to earn more profits, the amount of
disturbance compensation is P10,000.00. This disturbance compensation, again we strongly
recommend, should be given to the dismissed employee at the first instance, the moment it is shown
that his employer has committed the infractionof not complying with the 30-day written notice
requirementto tide him over during his economic dislocation.
The right of the laborers to be informed of their impending termination cannot be taken lightly, and the
award of any amount below P5,000.00 may be too anemic to satisfy the fundamental protection
especially accorded to labor and the workingman. In fact, it is hardly enough to sustain a family of three;
more so if the employee has five or more children, which seems to be the average size of a Filipino
family.
Henceforth, if the dismissal is for a just cause but without observance of the 30-day notice requirement,
the dismissal is deemed improper and irregular. If later the dismissal is ascertained to be without just
cause, the dismissed employee, is entitled to reinstatement, if this be feasible, otherwise to separation
pay and back wages plus disturbance compensation of P10,000.00 and moral damages, if warranted. On
the other hand, if the dismissal is ascertained to be with just cause, the dismissed employee is entitled
nevertheless to a disturbance compensation of P5,000.00 if the legal requirement of the 30-day notice
to both employee and DOLE has not been complied with.
In instances where there is obviously a ground for dismissal, as when the employee has become violent
and his presence would cause more harm to his co-workers and the security and serenity of the
workplace, the employee may be suspended in the meantime until he is heard with proper observance
of the 30-day notice requirement. Likewise, if the dismissal is for an authorized cause but without the
required notice, the dismissal is improper and irregular and the employee should be paid separation
pay, back wages and distur-
490
490
bance compensation of P5,000.00 or P10,000.00 depending on the cause. As already intimated, if the
authorized cause is for the purpose of saving the employer from imminent bankruptcy or business
losses, the disturbance compensation should be P5,000.00; otherwise, if the authorized cause is for the
employer, in the exercise of management prerogative, to save and earn more profits, the disturbance
compensation should be P10,000.00.
In the instant case, Serrano was given his walking papers only on the very same day his termination was
to take effect. DOLE was not served any written notice. In other words, there was non-observance of the
30-day notice requirement to both Serrano and the DOLE. Serrano was thus terminated for an
authorized cause but was not accorded his right to 30-day notice. Thus, his dismissal being improper and
irregular, he is entitled to separation pay and back wages the amounts of which to be determined by the
Labor Arbiter, plus P10,000.00 as disturbance compensation which, from its very nature, must be paid
immediately to cushion the impact of his economic dislocation.
One last note. This Separate Opinion is definitely not advocating a new concept in imposing the so-called
“disturbance compensation.”—Since Wenphil Corporation v. NLRC 26 this Court has already recognized
the necessity of imposing a sanction in the form of indemnity or even damages, when proper, not
specifically provided by any law, upon employers who failed to comply with the twin-notice
requirement. At the very least, what is being proposed to be adopted here is merely a change in the
terminology used, i.e., from “sanction,” “indemnity,” “damages” or “penalty,” to “disturbance
compensation” as it is believed to be the more appropriate term to accurately describe the lamentable
situation of our displaced employees.
Ideed, from the time the employee is dismissed from the service without noticein this case since 11
October 1991to the termination of his case, assuming it results in his rein-
________________
26 See Note 21.
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491
statement, or his being paid his back wages and separation pay, as the case may be, how long must he
be made to suffer emotionally and bear his financial burden? Will reinstating him and/or paying his back
wages adequately make up for the entire period that he was in distress for want of any means of
livelihood? Petitioner Serrano has been deprived of his only source of incomehis employmentfor the
past eight (8) years or so. Will his reinstatement and/or the payment of his back wages and separation
pay enable him to pay off his debts incurred in abject usuryto which he must have succumbedduring his
long period of financial distress? Will it be adequate? Will it be just? Will it be fair? Thus, do we really
and truly render justice to the workingman by simply awarding him full back wages and separation pay
without regard for the long period during which he was wallowing in financial difficulty?
FOR ALL THE FOREGOING, the Decision of respondent National Labor Relations Commission should be
MODIFIED. The termination of petitioner RUBEN SERRANO being based on an authorized cause should
be SUSTAINED AS VALID although DECLARED IRREGULAR for having been effected without the
mandatory 30-day notice.
ISETANN DEPARTMENT STORE, INC. should PAY petitioner SERRANO back wages and separation pay the
amounts of which to be determined by the Labor Arbiter, plus P10,000.00 as disturbance compensation
which must be paid immediately. Consequently, except as regards the disturbance compensation, the
case should be REMANDED to the Labor Arbiter for the immediate computation and payment of the
back wages and separation pay due petitioner.
EXCEPT as herein stated, I concur with the majority.
DISSENTING OPINION
PUNO, J.:
The rule of audi alteram partem—hear the other side, is the essence of procedural due process. That a
“party is not to
492
492
suffer in person or in purse without an opportunity of being heard”—is the oldest established principle
in administrative law.1 Today, the majority is ruling that the all important right of an employee to be
notified before he is dismissed for a just or authorized cause is not a requirement of due process. This is
a blow on the breadbasket of our lowly employees, a considerable erosion of their constitutional right to
security of tenure, hence this humble dissenting opinion.
A review of our law on dismissal is in order.
I. DISMISSAL DUE TO JUST CAUSE
The law allowing dismissal of an employee due to a just cause is provided in Article 282 of the Labor
Code:
“ART. 282. Termination by employer.—An employer may terminate an employment for any of the
following causes:
(d)Commission of the crime or offense by the employee against the person of his employer or any
(e)Other causes analogous to the foregoing.”
The long established jurisprudence2 is that to justify dismissal of an employee for a just cause, he must
be given two kinds of notice by his employer, viz.: (1) notice to apprise the employee of the particular
acts or omissions for which the
________________
1 Schwartz, Administrative Law, 1991 ed., p. 224 citing Painter v. Liverpool Gas Co., 3 Ad. & EL 433, 449,
11 Eng. Rep. 478 (K.B. 1836).
2 Kingsize Manufacturing Corp. vs. NLRC, 238 SCRA 349 (1994).
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493

dismissal is sought, and (2) subsequent notice to inform him of the employer’s decision to dismiss him.
Similarly, deeply ingrained is our ruling that these pre and post notice requirements are not mere
technicalities but are requirements of due process.3
Then came the case of Wenphil Corporation vs. NLRC and Mallare in 1989.4 It is the majority view that
Wenphil reversed the long standing policy of this Court on dismissal. This is too broad a reading of
Wenphil. A careful statement of the facts of Wenphil and the ruling of this Court is thus proper.
First, the facts. The private respondent Roberto Mallare is the assistant head of the backroom
department of petitioner Wenphil Corporation. At about 2:30 pm on May 20, 1985, Mallare had an
altercation with his co-employee, Job Barrameda, about tending the Salad Bar. He slapped Barrameda’s
cap, stepped on his foot, picked up an ice scooper and brandished it against the latter. He refused to be
pacified by another employee who reported the incident to Delilah Hermosura, assistant manager.
Hermosura summoned Mallare but the latter refused to see the former. It took a security guard to bring
Mallare to Hermosura. Instead of making an explanation, Mallare shouted profane words against
Hermosura. He declared that their altercation should only be settled by him and Barrameda.
The following morning, Mallare was suspended. In the afternoon, he was dismissed from the service. He
received an official notice of his dismissal four (4) days later.
Mallare filed with the Labor Arbiter a complaint for illegal suspension, illegal dismissal and unfair labor
practice. No hearing was conducted in view of the repeated absence of the counsel of Mallare. The
parties submitted their respective position papers. On December 3, 1986, the Arbiter denied the
complaint as he found Mallare guilty or grave misconduct and
________________
3 Ibid.
4 170 SCRA 69.
494
494
insubordination, which are just causes for dismissal. The Arbiter also ruled that Mallare was not denied
due process. On appeal, the NLRC reversed. It held that Mallare was denied due process before he was
dismissed. It ordered Mallare’s reinstatement and the payment of his one (1) year backwages.
On certiorari to this Court, we reversed the NLRC and reinstated the decision of the Arbiter with the
modification that petitioner should pay to Mallare an indemnity of P1,000.00 for dismissing Mallare
without any notice and hearing. We held:
“Petitioner insists that private respondent was afforded due process but he refused to avail of his right
to the same; that when the matter was brought to the labor arbiter he was able to submit his position
paper although the hearing cannot proceed due to the non-appearance of his counsel; and that the
private respondent is guilty of serious misconduct in threatening or coercing a co-employee which is a
ground for dismissal under Article 283 of the Labor Code.
The failure of petitioner to give private respondent the benefit of a hearing before he was dismissed
constitutes an infringement of his constitutional right to due process of law and equal protection of the
laws. The standards of due process in judicial as well as administrative proceedings have long been
established. In its bare minimum due process of law simply means giving notice and opportunity to be
heard before judgment is rendered.
The claim of petitioner that a formal investigation was not necessary because the incident, which gave
rise to the termination of private respondent, was witnessed by his co-employees and supervisors, is
without merit. The basic requirement of due process is that which hears before it condemns, which
proceeds upon inquiry and renders judgment only after trial.
However, it is a matter of fact that when the private respondent filed a complaint against petitioner, he
was afforded the right to an investigation by the labor arbiter. He presented his position paper as did the
petitioner. If no hearing was had, it was the fault of private respondent as his counsel failed to appear at
the scheduled hearings. The labor arbiter concluded that the dismissal of private respondent was for
just cause. He was found guilty of grave misconduct and insubordination. This is borne by the sworn
statements of witnesses. The Court is bound by this finding of the labor arbiter.
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By the same token, the conclusion of the public respondent NLRC on appeal that private respondent was
not afforded due process before he was dismissed is binding on this Court. Indeed, it is well taken and
supported by the records. However, it cannot justify a ruling that private respondent should be
reinstated with back wages as the public respondent NLRC so decreed. Although belatedly, private
respondent was afforded due process before the labor arbiter wherein the just cause of his dismissal
had ben established. With such finding, it would be arbitrary and unfair to order his reinstatement with
back wages.”
Three members of the Court filed concurring and dissenting opinions. Madam Justice Herrera opined
that: (a) Mallare was dismissed for cause, hence, he is not entitled to reinstatement and backwages; (b)
he was not denied due process; and (c) he has no right to any indemnity but to separation pay to
cushion the impact of his loss of employment. Mr. Justice Padilla took the view that: (1) Mallare was not
entitled to reinstatement and backwages as he was guilty of grave misconduct and insubordination; (2)
he was denied administrative due process; and (3) for making such denial, Wenphil should pay
“separation pay (instead of indemnity) in the sum of P1,000.00.”—Madam Justice Cortes held that: (1)
Mallare was not illegally dismissed; (2) he was not denied due process; (3) he was not entitled to
indemnity; and (4) if P1,000.00 was to be imposed on Wenphil as an administrative sanction, it should
form part of the public fund of the government.
I shall discuss later that Wenphil did not change our ruling that violation of the pre-dismissal notice
requirement is an infringement of due process.
II. DISMISSAL DUE TO AUTHORIZED CAUSE
The applicable law on dismissal due to authorized cause is Article 283 of the Labor Code which provides:
ART. 283. Closure of establishment and reduction of personnel.—The employer may also terminate the
to prevent losses or the closing or cessation of opera-
496
496
tion of the establishment or undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the [Department] of Labor and
Employment at least one (1) month before the intended date thereof. In case of termination due to the
installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a
separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every
year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or
cessation of operations of establishment or undertaking not due to serious business losses or financial
reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month
pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered
one (1) whole year.”
In Sebuguero v. NLRC,5 we held thru our esteemed Chief Justice Davide that “the requirement of notice
to both the employees concerned and the Department of Labor and Employment (DOLE) is mandatory
and must be written and given at least one month before the intended date of retrenchment.”—We
explained that the “notice to the DOLE is essential because the right to retrench is not an absolute
prerogative of an employer but is subject to the requirement of law that retrenchment be proved to
prevent losses. The DOLE is the agency that will determine whether the planned retrenchment is
justified and adequately supported by fact.”6 Nonetheless, we ruled:
“The lack of written notice to the petitioners and to the DOLE does not, however, make the petitioners’
retrenchment illegal such that they are entitled to the payment of back wages and separation pay in lieu
of reinstatement as they contend. Their retrenchment, for not having been effected with the required
notices, is merely defective. In those cases where we found the retrenchment to be illegal and ordered
the employees’ reinstatement and the payment of backwages, the validity of the cause for
retrenchment, that is the existence of imminent or actual serious or substantial losses, was
________________
5 248 SCRA 532, 545 (1995).
6 Ibid., p. 546.
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not proven. But here, such a cause is present as found by both the Labor Arbiter and the NLRC. There is
only a violation by GTI of the procedure prescribed in Article 283 of the Labor Code in effecting the
retrenchment of the petitioners.
It is now settled that where the dismissal of an employee is in fact for a just and valid cause and is so
proven to be but he is not accorded his right to due process, i.e., he was not furnished the twin
requirements of notice and the opportunity to be heard, the dismissal shall he upheld but the employer
must be sanctioned for noncompliance with the requirements of or for failure to observe due process.
The sanction, in the nature of indemnification or penalty, depends on the facts of each case and the
gravity of the omission committed by the employer and has ranged from P1,000.00 as in the cases of
Wenphil vs. National Labor Relations Commission, Seahorse Maritime Corp. vs. National Labor Relations
Commission, Shoemart, Inc. vs. National Labor Relations Commission, Rubberworld (Phils.) Inc. vs.
National Labor Relations Commission, Pacific Mills, Inc. vs. Alonzo, and Aurelio vs. National Labor
Relations Commission to P10,000.00 in Reta vs. National Labor Relations Commission and Alhambra
Industries, Inc. vs. National Labor Relations Commission. More recently, in Worldwide Papermills, Inc. vs.
National Labor Relations Commission, the sum of P5,000.00 was awarded to the employee as
indemnification for the employer’s failure to comply with the requirements of procedural due process.
Accordingly, we affirm the deletion by the NLRC of the award of back wages. But because the required
notices of the petitioners’ retrenchment were not served upon the petitioners and the DOLE, GTI must
be sanctioned for such failure and thereby required to indemnify each of the petitioners the sum of
P20,000.00 which we find to be just and reasonable under the circumstances of this case.”
III. RE-EXAMINATION OF THE WENPHIL DOCTRINE: FROM BAD TO WORSE
The minority of the Court has asked for a re-examination of Wenphil because as the majority correctly
observed, “the number of cases involving dismissals without the requisite notice to the employee
although effected for just or authorized causes suggests that the imposition of fine for violation of the
notice requirement has not been effective in deterring violations of the notice requirement.”
498
498
We must immediately set Wenphil in its proper perspective as it is a very exceptional case. Its doctrine
must be limited to its distinct facts. Its facts therefore ought to be carefully examined again. In Wenphil,
it was clearly established that the employee had a violent temper, caused trouble during office hours
and even defied his superiors as they tried to pacify him. The employee was working for a fast food
chain that served the public and where violence has no place. These facts were established only in the
proceedings before the Labor Arbiter after the employee filed a complaint for illegal dismissal. There
were no formal investigation proceedings before the employer as the employee was dismissed without
any notice by the employer. Given these facts, we ruled that the pre-dismissal notice requirement was
part of due process; nonetheless, we held that the employee was given due process as he was heard by
the Labor Arbiter; we found that the proceedings before the Labor Arbiter proved that the employee
was guilty of grave misconduct and insubordination; we concluded with the rule that it would be highly
prejudicial to the interest of the employer to reinstate the employee, but the employer must indemnify
the employee the amount of P1,000.00 for dismissing him without notice. We further held that “the
measure of this award depends on the facts of each case and the gravity of the omission committed by
the employer.”7
At the outset, I wish to emphasize that Wenphil itself held, and repeatedly held that “the failure of
petitioner to give private respondent the benefit of a hearing before he was dismissed, constitutes an
infringement of his constitutional right to due process of law and equal protection of the laws. The
standards of due process of law in judicial as well as administrative proceedings have long been
established. In its bare minimum due process of law simply means giving notice and opportunity to be
heard before judgment is rendered;”8 The Court then satisfied itself with this bare minimum when
________________
7 Op cit., p. 76.
8 Op cit, pp. 74-75.
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it held that the post dismissal hearing before the Labor Arbiter was enough compliance with the
demands of due process and refused to reinstate an eminently undesirable employee. Heretofore, the
Court was far from satisfied with this bare minimum as it strictly imposed on an employer compliance
with the requirement of pre-dismissal notice, violation of which resulted in orders of reinstatement of
the dismissed employee. This is the only wrinkle wrought by Wenphil in our jurisprudence on dismissal.
Nonetheless, it should be stressed that the Court still punished Wenphil’s violation of the predismissal
notice requirement as it was ordered to pay an indemnity of P1,000.00 to the employee. The indemnity
was based on the iterated and reiterated rule that “the dismissal of an employee must be for just or
authorized cause and after due process.”9
Our ten (10) years experience with Wenphil is not a happy one. Unscrupulous employers have abused
the Wenphil ruling. They have dismissed without notice employees including those who are not as
eminently undesirable as the Wenphil employee. They dismissed employees without notice as a general
rule when it should be the exception. The purpose of the pre-dismissal notice requirement was entirely
defeated by employers who were just too willing to pay an indemnity for its violation. The result, as the
majority concedes, is that the indemnity we imposed has not been effective to prevent unjust dismissals
of employees. To be sure, this is even a supreme understatement. The ugly truth is that Wenphil is the
mother of many unjust and unauthorized dismissals of employees who are too weak to challenge their
powerful employees.
As the Wenphil indemnity doctrine has proved to be highly inimical to the interest of our employees, I
humbly submit a return to the pre-Wenphil rule where a reasonless violation of the pre-dismissal notice
requirement makes the dismissal of an employee illegal and results in his reinstatement. In fine, we
should strike down as illegal the dismissal of an employee
________________
9 Op cit., p. 76.
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500
even if it is for a justified end if it is done thru unjustified means for we cannot be disciples of the
Machiavellian doctrine of the end justifies the means. With due respect, the majority decision comes too
near this mischievous doctrine by giving emphasis on the end and not the means of dismissal of
employees. What grates is that the majority today espouses a doctrine more pernicious than Wenphil
for now it announces that a violation of the pre-dismissal notice requirement does cot even concern due
process. The reasons relied upon by the majority for this new ruling against the job security of
employees cannot inspire assent.
FIRST. I would like to emphasize that one undesirable effect of Wenphil is to compel employees to seek
relief against illegal dismissals with the DOLE whereas before, a remedy can be sought before the
employer. In shifting this burden, an employee’s uneven fight against his employer has become more
uneven. Now, an illegally dismissed employee often goes to the DOLE without an exact knowledge of the
cause of his dismissal. As a matter of strategy, some employers today dismiss employees without notice.
They know that it is more advantageous for them to litigate with an employee who has no knowledge of
the cause of dismissal. The probability is that said employee will fail to prove the illegality of his
dismissal. All that he can prove is that he was dismissed without notice and the penalty for the omission
is a mere fine, a pittance.
The case at bar demonstrates how disastrous Wenphil has been to our helpless employees. In holding
that the petitioner failed to prove his cause of action, the majority held “. . . we have only the bare
assertion of petitioner that, in abolishing the security section, private respondent's real purpose was to
avoid payment to the security checkers of the wage increases provided in the collective bargaining
agreement approved in 1990.” The bare assertion of the petitioner is understandable. The notice given
to him spoke of a general groundretrenchment. No details were given about the employer’s sudden
retrenchment program. Indeed, the employee was dismissed on the day he received the notice in
violation of the 30-day requirement. He was given no time, no opportunity to ascer-
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501
tain and verify the real cause of his dismissal. Thus, he filed with the DOLE a complaint for illegal
dismissal with a hazy knowledge of its real cause. Heretofore, it is the employer whom we blame and
penalize if he does not notify his employee of the cause of his dismissal. Today, the majority puts the
blame on the employee for not knowing why he was dismissed when he was not given any notice of
dismissal. In truth, the suspicion of the petitioner in the case at bar that he was dismissed to avoid
payment of their wage increases is not without basis. The DOLE itself found that petitioner has unpaid
wages which were ordered to be paid by the employer. The majority itself affirmed this finding.
What hurts is that while the majority was strict with the petitioner-employee, it was not so with the
employer ISE-TANN. Immediately, it validated the finding of the NLRC that petitioner was dismissed due
to the redundancy of his position. This is inconsistent with the finding of the Labor Arbiter that the
employer failed to prove retrenchment, the ground it used to dismiss the petitioner. A perusal of the
records will show that Ms. Cristina Ramos, Personnel Administration Manager of the employer ISETANN
testified on the cause of dismissal of the petitioner. She declared that petitioner was retrenched due to
the installation of a labor saving device. Allegedly, the labor saving device was the hiring of an
independent security agency, thus:10
“x x x
Atty. Perdigon:
You said that your company decided to phase out the position of security checkers xxx
Ms. Ramos:
Yes Sir.
Q:
And instead hired the services of a security agency?
A:
Yes, sir.
xxx
_______________
10 TSN, August 4, 1992, pp. 30, 37-38, 42-49.
502
502
Q:
Did you not retrench the position of security checkers?
A:
We installed a labor saving device.
Q:
So you did not retrench?
A:
No, sir.
Q:
How about the position of Section Head of Security Department?
A:
It was abolished in 1991.
xxx
Q:
Are you aware of the retrenchment program of the company as stated in this letter?
A:
Actually it's not a retrenchment program. It's an installation of a labor saving device.
Q:
So you are telling this Court now that there was no retrenchment program?
A:
It was actually an installation of a labor saving device (emphasis supplied).

xxx
Q:
x x x What (is) this labor saving device that you are referring to?
A:
The labor saving device is that the services of a security agency were contracted to handle the services
of the security checkers of our company.
Q:
Are you sure of what labor saving means, Madam witness?
A:
Yes, sir.
Q:
You said you installed a labor saving device, and you installed a security agency as a labor saving device?
A:
We hired the services of a security agency.
Q:
So according to you x x x a security agency is a labor saving device?
Atty. Salonga:
Already answered, your Honor.”
Obviously, Ms. Ramos could not even distinguish between retrenchment and redundancy. The Labor
Arbiter thus ruled that petitioner’s dismissal was illegal. The NLRC, however, reversed. The majority
affirmed the NLRC ruling that ISE-TANN’s phase out of its security employees is a legitimate
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503
business decision, one that is necessary to obtain reasonable return from its investment. To use the
phrase of the majority, this is a “bare assertion.” Nothing in the majority decision shows how the return
of ISETANN’s investment has been threatened to justify its so-called business decision as legitimate.
SECOND. The majority holds that “the need is for a rule which, while recognizing the employee’s right to
notice before he is dismissed or laid off, at the same time acknowledges the right of the employer to
dismiss for any of the just causes enumerated in Art. 282 or to terminate employment for any of the
authorized causes mentioned in Arts. 283-284. If the Wenphil rule imposing a fine on an employer who
is found to have dismissed an employee for cause without prior notice is deemed ineffective in deterring
employer violations of the notice requirement, the remedy is not to declare the dismissal void if there
are just or valid grounds for such dismissal or if the termination is for an authorized cause. That would
be to uphold the right of the employee but deny the right of the employer to dismiss for cause. Rather,
the remedy is to consider the dismissal or termination to be simply ineffectual for failure of the
employer to comply with the procedure for dismissal or termination.”
With due respect, I find it most difficult to follow the logic of the majority. Before Wenphil, we protected
employees with the ruling that dismissals without prior notice are illegal and the illegally dismissed
employee must be reinstated with backwages. Wenphil diluted that rule when it held that due process is
satisfied if the employee is given the opportunity to be heard by the Labor Arbiter. It further held that an
employee cannot be reinstated if it is established in the hearing that his dismissal is for a just cause. The
failure of the employer to give a pre-dismissal notice is only to be penalized by payment of an
indemnity. The dilution of the rule has been abused by unscrupulous employers who then followed the
“dismiss now, pay later” strategy. This evil practice of employers was what I expected the majority to
address in reexamining the Wenphil doctrine. At the very least, I thought
504
504
that the majority would restore the balance of rights between an employee and an employer by giving
back the employee’s mandatory right to notice before dismissal. It is disquieting, however, that the
majority re-arranged this balance of right by tilting it more in favor of the employer’s right to dismiss.
Thus, instead of weakening a bit the right to dismiss of employers, the majority further strengthens it by
insisting that a dismissal without prior notice is merely “ineffectual” and not illegal.
The stubborn refusal of the majority to appreciate the importance of predismissal notice is difficult to
understand. It is the linchpin of an employees right against an illegal dismissal. The notice tells him the
cause of his dismissal. It gives him a better chance to contest his dismissal in an appropriate proceeding
as laid down in the parties’ collective bargaining agreement or the rules of employment established by
the employer, as the case may be. In addition, it gives to both the employee and employer more cooling
time to settle their differences amicably. In fine, the prior notice requirement and the hearing before the
employer give an employee a distinct, different and effective first level of remedy to protect his job. In
the event the employee is dismissed, he can still file a complaint with the DOLE with better knowledge
of the cause of his dismissal, with longer time to prepare his case, and with greater opportunity to take
care of the financial needs of his family pendente lite. The majority has taken away from employees this
effective remedy. This is not to say that the pre-dismissal notice requirement equalizes the fight
between an employee and an employer for the fight will remain unequal. This notice requirement
merely gives an employee a fighting chance but that fighting chance is now gone.
It is equally puzzling why the majority believes that restoring the employee’s right to pre-dismissal
notice will negate the right of an employer to dismiss for cause. The pre-Wenphil rule simply requires
that before the right of the employer to dismiss can be exercised, he must give prior notice to the
employee of its cause. There is nothing strange nor difficult about this requirement. It is no burden to an
employer.
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He is bereft of reason not to give the simple notice. If he fails to give notice, he can only curse himself.
He forfeits his right to dismiss by failing to follow the procedure for the exercise of his right. Employees
in the public sector cannot be dismissed without prior notice. Equal protection of law demands similar
treatment of employees in the private sector.
THIRD. The case at bar specifically involves Article 283 of the Labor Code which lays down four (4)
authorized causes for termination of employment.11 These authorized causes are: (1) installation of
labor-saving devices; (2) redundancy; (3) retrenchment to prevent losses; and (4) closing or cessation of
operation of the establishment or undertaking unless the closing is for the purpose of circumventing the
law. It also provides that prior to the dismissal of an employee for an authorized cause, the employer
must send two written notices at least one month before the intended dismissalone notice to the
employee and another notice to the Department of Labor and Employment (DOLE). We have ruled that
the right to dismiss on authorized causes is not an absolute prerogative of an employer.12 We explained
that the notice to the DOLE is necessary to enable it to ascertain the truth of the cause of termination.13
The DOLE is equipped with men and machines to determine whether the planned closure or cessation of
business or retrenchment or redundancy or installation of labor saving device is justified by economic
facts.14 For this reason too, we have held that notice to the employee is required to enable him to
contest the factual bases of the management decision or good faith of the retrenchment or redundancy
before the DOLE.15 In addition, this notice requirement gives an employee a little time to adjust to his
joblessness.16
________________
11 A fifth authorized cause is “disease of the employee” provided in Article 284 of the Code.
12 Sebuguero, supra.
13 International Hardware, Inc. v. National Labor Relations Commission, 176 SCRA 256, 259 (1989).
14 Sebuguero v. NLRC, supra.
15 Wiltshire File Co. v. NLRC, 193 SCRA 665, 676 (1991).
16 Balbalec v. NLRC, 251 SCRA 398, 406 (1995).
506
506
The majority insists that if an employee is laid off for an authorized cause under Article 283 in violation
of the prior notice requirement, his dismissal should not be considered void but only ineffectual. He shall
not be reinstated but paid separation pay and some backwages. I respectfully submit that an employee
under Article 283 has a stronger claim to the right to a predismissal notice and hearing. To begin with,
he is an innocent party for he has not violated any term or condition of his employment. Moreover, an
employee in an Article 283 situation may lose his job simply because of his employer’s desire for more
profit. Thus, the installation of a labor saving device is an authorized cause to terminate employment
even if its non-installation need not necessarily result in an over-all loss to an employer possessed by his
possessions. In an Article 283 situation, it is easy to see that there is a greater need to scrutinize the
allegations of the employer that he is dismissing an employee for an authorized cause. The acts involved
here are unilateral acts of the employer. Their nature requires that they should be proved by the
employer himself. The need for a labor saving device, the reason for redundancy, the cause for
retrenchment, the necessity for closing or cessation of business are all within the knowledge of the
employer and the employer alone. They involve a constellation of economic facts and factors usually
beyond the ken of knowledge of an ordinary employee. Thus, the burden should be on the employer to
establish and justify these authorized causes. Due to their complexity, the law correctly directs that
notice should be given to the DOLE for it is the DOLE more than the lowly employee that has the
expertise to validate the alleged cause in an appropriate hearing. In fine, the DOLE provides the
equalizer to the powers of the employer in an Article 283 situation. Without the equalizing influence of
DOLE, the employee can be abused by his employer.
Further, I venture the view that the employee’s right to security of tenure guaranteed in our
Constitution calls for a pre-dismissal notice and hearing rather than a post facto dismissal hearing. The
need for an employee to be heard before
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507
he can be dismissed cannot be overemphasized. As aforestated, in the case at bar, petitioner was a
regular employee of ISETANN. He had the right to continue with his employment. The burden to
establish that this right has ceased is with ISETANN, as petitioner’s employer. In fine, ISETANN must be
the one to first show that the alleged authorized cause for dismissing petitioner is real. And on this
factual issue, petitioner must be heard. Before the validity of the alleged authorized cause is established
by ISETANN, the petitioner cannot be separated from employment. This is the simple meaning of
security of tenure. With due respect, the majority opinion will reduce this right of our employees to a
mere illusion. It will allow the employer to dismiss an employee for a cause that is yet to be established.
It tells the employee that if he wants to be heard, he can file a case with the labor arbiter, then the
NLRC, and then this Court. Thus, it unreasonably shifts the burden to the employee to prove that his
dismissal is for an unauthorized cause.
The pernicious effects of the majority stance are self-evident in the case at bar. For one, petitioner
found himself immediately jobless and without means to support his family. For another, petitioner was
denied the right to rely on the power of DOLE to inquire whether his dismissal was for a genuine
authorized cause. This is a valuable right, for all too often, a lowly employee can only rely on DOLE’S vast
powers to check employer abuses on illegal dismissals. Without DOLE, poor employees are preys to the
claws of powerful employers. Last but not the least, it was the petitioner who was forced to file a
complaint for illegal dismissal. To a jobless employee, filing a complaint is an unbearable burden due to
its economic cost. He has to hire a lawyer and defray the other expenses of litigation while already in a
state of penury. At this point, the hapless employee is in a no win position to fight for his right. To use a
local adage, “aanhin pa ang damo kung patay na ang kabayo.”
In the case at bar, the job of the petitioner could have been saved if DOLE was given notice of his
dismissal. The records show that petitioner worked in ISETANN as security checker
508
508
for six (6) years. He served ISETANN faithfully and well. Nonetheless, in a desire for more profits, and not
because of losses, ISETANN contracted out the security work of the company. There was no effort
whatsoever on the part of ISETANN to accommodate petitioner in an equivalent position. Yet, there was
the position of Safety and Security Supervisor where petitioner fitted like a perfect T. Despite
petitioner's long and loyal service, he was treated like an outsider, made to apply for the job, and given a
stringent examination which he failed. Petitioner was booted out and given no chance to contest his
dismissal. Neither was the DOLE given the chance to check whether the dismissal of petitioner was really
for an authorized cause. All these because ISETANN did not follow the notice and hearing requirement
of due process.
FOURTH. The majority has inflicted a most serious cut on the job security of employees. The majority did
nothing to restore the pre-Wenphil right of employees but even expanded the right to dismiss of
employer by holding that the pre-dismissal notice requirement is not even a function of due process.
This seismic shift in our jurisprudence ought not to pass.
The key to the new majority ruling is that the “due process clause of the Constitution is a limitation on
governmental powers. It does not apply to the exercise of private power such as the termination of
employment under the Labor Code.” The main reason alleged is that “only the State has authority to
take the life, liberty, or property of the individual. The purpose of the Due Process Clause is to ensure
that the exercise of this power is consistent with settled usage of civilized society.”
There can be no room for disagreement on the proposition that the due process clause found in the Bill
of Rights of the Constitution is a limitation on governmental powers. Nor can there be any debate that
acts of government violative of due process are null and void. Thus, former Chief Justice Roberto
Concepcion emphasized in Cuaycong v. Senbengco17 that
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17 110 Phil. 113 (1960).
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“x x x acts of Congress as well as those of the Executive, can deny due process only under pain of nullity,
and judicial proceedings suffering from the same flaw are subject to the same sanction, any statutory
provision to the contrary notwithstanding.” With due respect to the majority, however, I part ways with
the majority in its new ruling that the due process requirement does not apply to the exercise of private
power. This overly restrictive majority opinion will sap the due process right of employees of its
remaining utility. Indeed, the new majority opinion limiting violations of due process to government
action alone is a throwback to a regime of law long discarded by more progressive countries. Today,
private due process is a settled norm in administrative law. Per Schwartz, a known authority in the field,
viz.:18
“Private Due Process
As already stressed, procedural due process has proved of an increasingly encroaching nature. Since
Goldberg v. Kelly, the right to be heard has been extended to an ever-widening area, covering virtually
all aspects of agency action, including those previously excluded under the privilege concept. The
expansion of due process has not been limited to the traditional areas of administrative law. We saw
how procedural rights have expanded into the newer field of social welfare, as well as that of education.
But due process expansion has not been limited to these fields. The courts have extended procedural
protections to cases involving prisoners and parolees, as well as the use of established adjudicatory
procedures. Important Supreme Court decisions go further and invalidate prejudgement wage
garnishments and seizures of property under replevin statutes where no provision is made for notice
and hearing. But the Court has not gone so far as to lay down an inflexible rule that due process requires
an adversary hearing when an individual may be deprived of any possessory interest, however brief the
dispossession and however slight the monetary interest in the property. Due process is not violated
where state law requires, as a precondition to invoking the state’s aid to sequester property of a
defaulting debtor, that the creditor furnish adequate security and make a specific showing of probable
cause before a judge.
________________
18 Schwartz, op cit., pp. 273-274.
510
510

In addition, there has been an extension of procedural due process requirements from governmental to
private action. In Section 5.16 we saw that Goldberg v. Kelly has been extended to the eviction of a
tenant from a public housing project. The courts have not limited the right to be heard to tenants who
have governmental agencies as landlords. Due process requirements also govern acts by “private”
landlords where there is sufficient governmental involvement in the rented premises. Such an
involvement exists in the case of housing aided by Federal Housing Administration financing and tax
advantages. A tenant may not be summarily evicted from a building operated by a “private” corporation
where the corporation enjoyed substantial tax exemption and had obtained an FHA-insured mortgage,
with governmental subsidies to reduce interest payments. The “private” corporation was so saturated
with governmental incidents as to be limited in its practices by constitutional due process. Hence, it
could not terminate tenancies without notice and an opportunity to be heard.”
But we need not rely on foreign jurisprudence to repudiate the new majority ruling that due process
restricts government alone and not private employers like ISETTAN. This Court has always protected
employees whenever they are dismissed for an unjust cause by private employers. We have consistently
held that before dismissing an employee for a just cause, he must be given notice and hearing by his
private employer. In Kingsize Manufacturing Corporation vs. NLRC,19 this Court, thru Mr. Justice
Mendoza, categorically ruled:
“x x x (P)etitioners failure to give notice with warning to the private respondents before their services
were terminated puts in grave doubt petitioners’ claim that dismissal was for a just cause. Section 2 Rule
XIV of the rules implementing the Labor Code provides:
“An employer who seeks to dismiss a worker shall furnish him a written notice stating the particular acts
or omission constituting the ground for dismissal. In case of abandonment of work, the notice shall be
served on the worker's last known address.
________________
19 Supra.
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511
“The notice required, x x x, actually consists of two parts to be separately served on the employee, to
wit: (1) notice to apprise the employee of the particular acts or omissions for which the dismissal is
sought: and (2) subsequent notice to inform him of the employer's decision to dismiss him.
“This requirement is not a mere technicality but a requirement of due process to which every employee
is entitled to insure that the employer’s prerogative to dismiss or lay off is not abused or exercised in an
arbitrary manner. This rule is clear and unequivocal x x x.”20
In other words, we have long adopted in our decisions the doctrine of private due process. This is as it
ought to be. The 1987 Constitution guarantees the rights of workers, especially the right to security of
tenure in a separate articlesection 3 of Article XIII entitled Social Justice and Human Rights. Thus, a 20-20
vision of the Constitution will show that the more specific rights of labor are not in the Bill of Rights
which is historically directed against government acts alone. Needless to state, the constitutional rights
of labor should be safeguarded against assaults from both government and private parties. The majority
should not reverse our settled rulings outlawing violations of due process by employers in just causes
cases.
To prop up its new ruling against our employees, the majority relates the evolution of our law on
dismissal starting from Article 302 of the Spanish Code of Commerce, to the New Civil Code of 1950, to
R.A. No. 1052 (Termination Pay Law), then to RA No. 1787. To complete the picture, let me add that on
May 1, 1974, the Labor Code (PD 442) was signed into law by former President Marcos. It took effect on
May 1,
________________
20 See also JGB and Associates, Inc. vs. NLRC, 254 SCRA 457 (1996); Philippine Savings Bank v. NLRC, 261
SCRA 409 (1996); Pasudeco, Inc. vs. NLRC, 272 SCRA 737 (1997); P.I. Manpower, Inc. vs. NLRC, 267 SCRA
451 (1997); Canura v. NLRC, 279 SCRA 45 (1997); International Pharmaceuticals, Inc. vs. NLRC, 287 SCRA
213 (1998); Mabuhay Development Industries vs. NLRC, 288 SCRA 1 (1998), all ponencias of Mr. Justice
Mendoza.
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512
1974 or six months after its promulgation. The right of the employer to terminate the employment was
embodied in Articles 283,21 284,22 and 285.23 Batas Pambansa Blg. 130 which was enacted on August
21, 1981 amended Articles 283 and 284, which today are cited as Arts. 282 and 283 of the Labor Code.24
_______________
21 Art. 283. Termination by employer.An employer may terminate an employment without a definite
period for any of the following just causes:
(a)The closing or cessation of operation of the establishment or enterprise, or where the employer has
to reduce his work force by more than one-half (1/2) due to serious business reverses, unless the closing
is for the purpose of circumventing the provisions of this chapter;
(b)Serious misconduct or willful disobedience by the employee of the orders of his employer or
(c)Gross and habitual neglect by the employee of his duties;
(d)Fraud or willful breach by the employee of the trust reposed in him by his employer or
representative;
(e)Commission of a crime or offense by the employee against the person of his employer or any
immediate member of his family or representative; and
(f)Other causes analogous to the foregoing.
22 Art. 284. Reduction of personnel.The termination of employment of any employee due to the
installation of labor saving devices, redundancy, retrenchment to prevent losses, and other similar
causes, shall entitle the employee affected thereby to separation pay x x x.
23 Art. 285. Disease as a ground for termination.An employer may terminate the services of an
employee who have been found to be suffering from any disease and whose continued employment is
prohibited by law or is prejudicial to his health as well as to the health of his co-employees x x x.
24 The acljustment of the numbering of the Articles is due to the fact that there are two (2) Article 238.
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On March 2, 1989, Republic Act No. 6715 was approved which amended, among others, Article 277 of
the Labor Code. Presently, Article 277(b) reads:
“Art. 277. Miscellaneous provisions.(a) x x x.
“(b) Subject to the constitutional right of workers to security of tenure and their right to be protected
against dismissal except for a just or authorized cause and without prejudice to the requirement of
notice under Article 283 of this Code, the employer shall furnish the worker whose employment is
sought to be terminated a written notice containing a statement of the causes for termination and shall
afford the latter ample opportunity to be heard and to defend himself with the assistance of his
representative if he so desires in accordance with company rules and regulations promulgated pursuant
to the guidelines set by the Department of Labor and Employment. Any decision taken by the employer
shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by
filing a complaint with the regional branch of the National Labor Relations Commission. The burden of
proving that the termination was for a valid or authorized cause shall rest on the employer, x x x.”
Previous to the amendment, Article 277 (b) read:
“Article 277. Miscellaneous provisions.(a) x x x.

“(b) With or without a collective agreement, no employer may shut down his establishment or dismiss
or terminate the employment of employees with at least one year of service during the last two years,
whether such service is continuous or broken, without prior written authority issued in accordance with
the rules and regulations as the Secretary may promulgate.”
Rule XIV, Book V of the 997 Omnibus Rules Implementing the Labor Code provides:
“Termination of Employment
“Sec 1. Security of tenure and due process.No worker shall be dismissed except for a just or authorized
cause provided by law and after due process.
“Sec 2. Notice of dismissal.Any employer who seeks to dismiss a worker shall furnish him a written
notice stating the
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514
particular acts or omissions constituting the grounds for his dismissal, x x x
xxx
“Sec. 5. Answer and hearing.—The worker may answer the allegations stated against him in the notice
of dismissal within a reasonable period from receipt of such notice. The employer shall afford the
worker ample opportunity to be heard and to defend himself with the assistance of his representative, if
he so desires.”
These laws, rules and regulations should be related to our decisions interpreting them. Let me therefore
emphasize our rulings holding that the pre-dismissal notice requirement is part of due process. In
Batangas Laguna Tayabas Bus. Co. vs. Court of Appeals,25 which was decided under the provisions of RA
No. 1052 as amended by RA No. 1787, this Court ruled that “the failure of the employer to give the
[employee] the benefit of a hearing before he was dismissed constitute an infringement on his
constitutional right to due process of law and not to be denied the equal protection of the laws. x x x.
Since the right of [an employee] to his labor is in itself a property and that the labor agreement between
him and [his employer] is the law between the parties, his summary and arbitrary dismissal amounted to
deprivation of his property without due process.” Since then, we have consistently held that before
dismissing an employee for a just cause, he must be given notice and hearing by his private employer as
a matter of due process.
I respectfully submit that these rulings are more in accord with the need to protect the right of
employees against illegal dismissals. Indeed, our laws and our present Constitution are more protective
of the rights and interests of employees than their American counterpart. For one, to justify private due
process, we need not look for the factors of “sufficient governmental involvement” as American courts
do. Article 1700 of our Civil Code explicitly provides:
________________
25 71 SCRA 470 (1976).
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“Art. 1700. The relation between capital and labor are not merely contractual. They are so impressed
with public interest that labor contracts must yield to the common good. Therefore, such contracts are
subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop,
wages, working conditions, hours of labor and similar subjects.”
Nor do we have to strain on the distinction made by American courts between property and privilege
and follow their ruling that due process will not apply if what is affected is a mere privilege. It is our
hoary ruling that labor is property within the contemplation of the due process clause of the
Constitution. Thus, in Philippine Movie Pictures Workers Association vs. Premiere Productions, Inc.,26
private respondent-employer filed with the Court of Industrial Relations (CIR) a petition seeking
authority to lay off forty-four of its employees. On the date of the hearing of the petition, at the request
of the counsel of the private respondent, the judge of the CIR conducted an ocular inspection in the
premises of the employer. He interrogated fifteen laborers. On the basis of the ocular inspection, the
judge concluded that the petition for lay off was justified. We did not agree and we ruled that “the right
of a person to his labor is deemed to be property within the meaning of constitutional guarantees. That
is his means of livelihood. He cannot be deprived of his labor or work without due process of law. x x x
(T)here are certain cardinal primary rights which the Court of Industrial Relations must respect in the
trial of every labor case. One of them is the right to a hearing which includes the right of the party
interested to present his own case and to submit evidence in support thereof.”
I wish also to stress that the 1999 Rules and Regulations implementing the Labor Code categorically
characterize this pre-dismissal notice requirement as a requirement of due process. Rule XXIII provides:
________________
26 92 Phil. 843 (1953).
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516
“Section 2. Standards of due process: requirements of notice.—In all cases of termination of

employment, the following standards of due process shall be substantially observed:
I. For termination of employment based on just causes as defined in Article 282 of the Code:
(a)A written notice served on the employee specifying the ground or grounds for termination, and giving
to said employee reasonable opportunity within which to explain his side;
(b)A hearing or conference during which the employee concerned, with the assistance of counsel if the
employee so desires, is given opportunity to respond to the cbarge, present his evidence or rebut the
evidence presented against him; and
(c)A written notice of termination served on the employee indicating that upon due consideration of all
the circumstance, grounds have been established to justify his termination.
In case of termination, the foregoing notices shall be served on the employee's last known address.
II. For termination of employment as based on authorized causes defined in Article 283 of the Code, the
requirements of due process shall be deemed complied with upon service of a written notice to the
employee and the appropriate Regional Office of the Department at least thirty (30) days before the
effectivity of the termination, specifying the gound or grounds for termination.”
The new ruling of the majority is not in consonance with this Rule XXIII.
If we are really zealous of protecting the rights of labor as called for by the Constitution, we should
guard against every violation of their rights regardless of whether the government or a private party is
the culprit. Section 3 of Article XIII of the Constitution requires the State to give full protection to labor.
We cannot be faithful to this duty if we give no protection to labor when the violator of its rights
happens to be private parties like private employers. A private person does not have a better right than
the government to violate an employee’s
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right to due process. To be sure, violation of the particular right of employees to security of tenure
comes almost always from their private employers. To suggest that we take mere geriatric steps when it
comes to protecting the rights of labor from infringement by private parties is farthest from the intent of
the Constitution. We trivialize the right of the employee if we adopt the rule allowing the employer is
usually defined in the parties’ collective bargaining agreement or in its absence, on the rules and
regulations made by the employer himself. This procedure is carefully designed to be bias free for it is to
the interest of both the employee and the employer that only a guilty employee is disciplined or
dismissed. Hence, where the charge against an employee is serious, it is standard practice to include in
the investigating committee an employee representative to assure the integrity of the process. In
addition, it is usual practice to give the aggrieved employee an appellate body to review an unfavorable
decision. Stated otherwise, the investigators are mandated to act impartially for to do otherwise can
bring havoc less to the employee but more to the employer. For one, if the integrity of the grievance
procedure becomes suspect, the employees may shun it and instead resort to coercive measures like
picketing and strikes that can financially bleed employers. For another, a wrong, especially a biased
judgment can always be challenged in the DOLE and the courts and can result in awards of huge
damages against the company. Indeed, the majority ruling that an employer cannot att as an impartial
judge has no empirical evidence to support itself. Statistics in the DOLE will prove the many cases won
by employees before the grievance committees manned by impartial judges of the company.
Next, the majority holds that “the requirement to hear an employee before he is dismissed should be
considered simply as an application of the Justinian precept, embodied in the Civil Code, to act with
justice, give everyone his due, and observe honesty and good faith toward one’s fellowmen.” It then
rules that violation of this norm will render the employer liable for damages but will not render his act of
dismissal void. Again, I cannot join the majority stance. The faultline of
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518
this ruling lies in the refusal to recognize that employer-employee relationship is governed by special
labor laws and not by the Civil Code. The majority has disregarded the precept that relations between
capital and labor are impressed with public interest. For this reason, we have the Labor Code that
specially regulates the relationship between employer-employee including dismissals of employees.
Thus, Article 279 of the Labor Code specifically provides that “in cases of regular employment, the
employer shall not terminate the services of an employee except for a just cause or when authorized by
this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without
loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent computed from the time of his compensation was withheld
from him up to the time of his actual reinstatement.” This provision of the Labor Code clearly gives the
remedies that an unjustly dismissed employee deserves. It is not the Civil Code that is the source of his
remedies.
The majority also holds that lack of notice in an Article 283 situation merely makes an employee
dismissal “ineffectual” but not illegal. Again, the ruling is sought to be justified by analogy and our
attention is called to Article 1592, in relation to Article 1191 of the Civil Code. It is contended that
“under these provisions, while the power to rescind is implied in reciprocal obligations, nonetheless, in
cases involving the sale of immovable property, the vendor cannot rescind the contract even though the
vendee defaults in the payment of the price, except by bringing an action in court or giving notice of
rescission by means of a notarial demand.” The analogy of the majority cannot be allowed both in law
and in logic. The legal relationship of an employer to his employee is not similar to that of a vendor and
a vendee. An employee suffers from a distinct disadvantage in his relationship with an employer, hence,
the Constitution and our laws give him extra protection. In contrast, a vendor and a vendee in a sale of
immovable property are at economic par with each other. To consider an employer-employee
relationship as similar to a sale
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of commodity is an archaic abomination. An employer-employee relationship involves the common

good and labor cannot be treated as a mere commodity. As well-stated by former Governor General
Leonard Wood in his inaugural message before the 6th Philippine Legislature on October 27, 1922, “it is
opportune that we strive to impress upon all the people that labor is neither a chattel nor a commodity,
but human and must be dealt with from the standpoint of human interests.”
Next, the majority holds that under the Labor Code, only the absence of a just cause for the termination
of employment can make the dismissal of an employee illegal. Quoting Article 279 which provides:
“Security of Tenure.—In cases of regular employment, the employer shall not terminate the services of
an employee except for a just cause or when authorized by this Title. An employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the time of his
actual reinstatement.”
it is then rationalized that “to hold that the employer’s failure to give notice before dismissing an
employee x x x results in the nullity of the dismissal would, in effect, be to amend Article 279 by adding
another ground, for considering a dismissal illegal” With due respect, the majority has misread Article
279. To start with, the article is entitled “Security of Tenure” and therefore protects an employee
against dismissal not only for an unjust cause but also for an unauthorized cause. Thus, the phrase
“unjustly dismissed” refers to employees who are dismissed without just cause and to employees who
are laid off without any authorized cause. As heretofore shown, we have interpreted dismissals without
prior notice as illegal for violating the right to due process of the employee. These rulings form part of
the law of the land and Congress was aware of them when it enacted the Labor Code and when its
implementing rules and regulations were promulgated especially the rule ordering employers to follow
due process when dis-
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missing employees. Needless to state, it is incorrect for the majority to urge that we are in effect
amending Article 279.
In further explication of its ruling, the majority contends “what is more, it would ignore the fact that
under Art. 285, if it is the employee who fails to give a written notice to the employer that he is leaving
the service of the latter, at least one month in advance, his failure to comply with the legal requirement
does not result in making his resignation void but only in making him liable for damages.” Article 285(a)
states: “An employee may terminate without just cause the employee-employer relationship by serving
a written notice on the employer at least one (1) month in advance. The employer upon whom no such
notice was served may hold the employee liable for damages.”
In effect, the majority view is that its new ruling puts at par both the employer and the employeeunder
Article 285, the failure of an employee to pre-notify in writing his employer that he is terminating their
relationship does not make his walk-out void; under its new ruling, the failure of an employer to pre-
notify an employee before his dismissal does not also render the dismissal void. By this new ruling, the
majority in a short stroke has rewritten the law on dismissal and tampered its pro-employee philosophy.
Undoubtedly, Article 285 favors the employee as it does not consider void his act of terminating his
employment relationship before giving the required notice. But this favor given to an employee just like
the other favors in the Labor Code and the Constitution are precisely designed to level the playing field
between the employer and the employee. It cannot be gainsaid that employees are the special subject
of solicitous laws because they have been and they continue to be exploited by unscrupulous
employers. Their exploitation has resulted in labor warfare that has broken industrial peace and slowed
down economic progress. In the exercise of their wisdom, the founding fathers of our 1935, 1973 and
1987 Constitutions as well as the members of our past and present Congresses, have decided to give
more legal protection and better legal treatment to our employees in their relationship with their
employer. Expressive
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of this policy is President Magsaysay’s call that “he who has less in life should have more in law.”—I
respectfully submit that the majority cannot revise our laws nor shun the social justice thrust of our
Constitution in the guise of interpretation especially when its result is to favor employers and disfavor
employees. The majority talks of high nobility but the highest nobility it to stoop down to reach the
poor.
IV. NO UNJUST RESULTS OF CONSIDERING DISMISSALS WITHOUT PRIOR NOTICE AS ILLEGAL
The majority further justifies its new ruling by holding: “The refusal to look beyond the validity of the
initial action taken by the employer to terminate employment either for an authorized or just cause can
result in an injustice to the employer. For not having been given notice and hearing before dismissing an
employee, who is otherwise guilty of, say, theft, or even of an attempt against the life of the employer,
an employer will be forced to keep in his employ such guilty employee. This is unjust.
It is true the Constitution regards labor as “a primary social economic force.” But so does it declare that
it “recognizes the indispensable role of the private sector, encourages private enterprise, and provides
incentives to needed investment.” The Constitution bids the State to “afford full protection to Labor.”
But it is equally true that “the law, in protecting the rights of the laborer, authorizes neither oppression
nor self-destruction of the employer.” And it is oppression to compel the employer to continue in
employment one who is guilty or to force the employer to remain in operation when it is not
economically in his interest to do so.”
With due respect, I cannot understand this total turnaround of the majority on the issue of the
unjustness of lack of pre-dismissal notice to an employee. Heretofore, we have always considered this
lack of notice as unjust to the employee. Even under Article 302 of the Spanish Code of Commerce of
1882 as related by the majority, an employer who opts to dismiss an employee without any notice has
to pay a mesada equivalent to his salary for one month because of its unjustness. This policy was
modified by our legislators in favor of a more liberal treatment of labor as our country came
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522
under the influence of the United States whose major labor laws became the matrix of our own laws like
R.A. 875, otherwise known as the Industrial Peace Act. In accord with these laws, and as aforediscussed,
we laid down the case law that dismissals without prior notice offend due process. This is the case law
when the Labor Code was enacted on May 1, 1974 and until now despite its amendments. The 1935 and
the 1973 Constitutions did not change this case law. So with the 1987 Constitution which even
strengthened the rights of employees, especially their right to security of tenure. Mr. Justice Laurel in his
usual inimitable prose expressed this shift in social policy in favor of employees as follows:
“It should be observed at the outset that our Constitution was adopted in the midst of surging unrest
and dissatisfaction resulting from economic and social distress which was threatening the stability of
governments the world over. Alive to the social and economic forces at work, the framers of our
Constitution boldly met the problems and difficulties which faced them and endeavored to crystallize,
with more or less fidelity, the political, social and economic propositions of their age, and this they did,
with the consciousness that the political and philosophical aphorism of their generation will, in the
language of a great jurist, ‘be doubted by the next and perhaps entirely discarded by the third.’ (Chief
Justice Winslow in Gorgnis v. Falk Co., 147 Wis., 327; 133 N.W., 209). Embodying the spirit of the present
epoch, general provisions were inserted in the Constitution which are intended to bring about the
needed social and economic equilibrium between component elements of society through the
application of what may be termed as the justitia communis advocated by Grotius and Leibnitz many
years ago to be secured through the counter-balancing of economic and social forces and employers or
landlords, and employees or tenants, respectively; and by prescribing penalties for the violation of the
orders and later, Commonwealth Act No. 213, entitled ‘An Act to define and regulate legitimate labor
organizations.’ ”27
This ingrained social philosophy favoring employees has now been weakened by the new ruling of the
majority. For while
________________
27 Concurring opinion in Ang Tibay, et al. vs. Court of Industrial Relations, et al., 69 Phil. 635 (1940).
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this Court has always considered lack of pre-dismissal notice as unjust to employees, the new ruling of
the majority now declares it is unjust to employers as if employers are the ones exploited by employees.
In truth, there is nothing unjust to employers by requiring them to give notice to their employees before
denying them their jobs. There is nothing unjust to the duty to give notice for the duty is a reasonable
duty. If the duty is reasonable, then it is also reasonable to demand its compliance before the right to
dismiss on the part of an employer can be exercised. If it is reasonable for an employer to comply with
the duty, then it can never be unjust if noncompliance therewith is penalized by denying said employer
his right to dismiss. In fine, if the employer’s right to dismiss an employee is forfeited for his failure to
comply with this simple, reasonable duty to pre-notify his employee, he has nothing to blame but
himself. If the employer is estopped from litigating the issue of whether or not he is dismissing his
employee for a just or an authorized cause, he brought the consequence on to himself. The new ruling
of the majority, however, inexplicably considers his consequence as unjust to the employer and it
merely winks at his failure to give notice.
V. A LAST WORD
The new ruling of the majority erodes the sanctity of the most important right of an employee, his
constitutional right to security of tenure. This right will never be respected by the employer if we merely
honor the right with a price tag. The policy of “dismiss now and pay later” favors monied employers and
is a mockery of the right of employees to social justice. There is no way to justify this pro-employer
stance when the 1987 Constitution is undeniably more pro-employee than our previous fundamental
laws. Section 18 of Article II (State Policies) provides that “the State affirms labor as a primary social
economic force. It shall protect the rights of workers and promote their welfare.” Section 1, Article XIII
(Social Justice and Human Rights) calls for the reduction of economic inequalities. Section 3, Article XIII
(Labor) directs the State to accord full protection to labor and to guaranty security of
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tenure. These are constitutional polestars and not mere works of cosmetology. Our odes to the poor will
be meaningless mouthfuls if we cannot protect the employee’s right to due process against the power
of the peso of employers.
To an employee, a job is everything. Its loss involves terrible repercussions—stoppage of the schooling
of children, ejectment from leased premises, hunger to the family, a life without any safety net. Indeed,
to many employees, dismissal is their lethal injection. Mere payment of money by way of separation pay
and backwages will not secure food on the mouths of employees who do not even have the right to
choose what they will chew.
I vote to grant the petition.
SEPARATE (Concurring and Dissenting) OPINION
VITUG, J.:
The lawful severance by an employer of an employer-employee relationship would require a valid cause.
There are, under the Labor Code, two groups of valid causes, and these are the just causes under Article
2821 and the authorized
_______________
1 ART. 282. Termination by employer—An employer may terminate an employment for any of the
following causes:
(c)Fraud or willful breach by the employee of the trustreposed in him by his employer or duly authorized
representative;
(e)Other causes analogous to the foregoing.
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causes under Article 2832 and Article 284.3 An employee whose employment is terminated for a just
cause is not entitled to the payment of separation benefits.4
_______________
2 ART. 283. Closure of establishment and reduction of personnel.The employer may also terminate the
to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the
closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the
workers and the Ministry of Labor and Employment at least one (1) month before the intended date
thereof. In case of termination due to the installation of labor saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to
at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to
prevent losses and in cases of closure or cessation of operations of establishment or undetaking not due
to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month
pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at
least (6) months shall be considered one (1) whole year.
3 ART. 284. Disease as ground for termination.An employer may terminate the services of an employee
who has been found to be suffering from any disease and whose continued employment is prohibited by
law or is prejudicial to his health as well as to the health of his co-employees: Provided, That he is paid
separation pay equivalent to at least one (1) month salary or to one-half (1/2) month salary for every
year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1)
whole year.
4 See San Miguel Corporation vs. NLRC, 255 SCRA 580. Section 7, Rule I, Book VI, of the Omnibus Rules
Implementing the Labor Code provides:
“Sec 7. Termination of employment by employer.The just causes for terminating the services of an
employee shall be those provided in Article 282 of the Code. The separation from work of an employee
for a just cause does not entitle him to the termination pay provided in Code, without prejudice,
however, to whatever rights, benefits and privileges he may have under the applicable individual or
collective bargaining
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Separation pay would be due, however, when the lay-off is on account of an authorized cause. The
amount of separation pay would depend on the ground for the termination of employment. A lay-off
due to the installation of a labor saving device, redundancy (Article 283) or disease (Article 284), entitles
the worker to a separation pay equivalent to “one (1) month pay or at least one (1) month pay for every
year of service, whichever is higher.” When the termination of employment is due to retrenchment to
prevent losses, or to closure or cessation of operations of an establishment or undertaking not due to
serious business losses or financial reverses, the separation pay is only an equivalent of “one (1) month
pay or at least one-half (1/2) month pay for every year of service, whichever is higher.” In the above
instances, a fraction of at least six (6) months is considered as one (1) whole year.
Due process of law, in its broad concept, is a principle in our legal system that mandates due protection
to the basic rights, inherent or accorded, of every person against harm or transgression without an
intrinsically just and valid law, as well as an opportunity to be heard before an impartial tribunal, that
can warrant such an impairment. Due process guarantees against arbitrariness and bears on both
substance and procedure. Substantive due process concerns itself with the law, its essence, and its
concomitant efficacy; procedural due process focuses on the rules that are established in order to
ensure meanigful adjudications appurtenant thereto.
In this jurisdiction, the right to due process is constitutional and statutory.
Due process in the context of a termination of employment, particularly, would be two-fold, i.e.,
substantive due process which is complied with when the action of the employer is predicated on a just
cause or an authorized cause, and procedural due process which is satisfied when the employee has the
opportunity to contest the existence of the ground invoked by the employer in terminating the contract
of employment
________________
agreement with the employer or voluntary employer policy or practice.”
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VOL. 323, JANUARY 27, 2000
527
and to be heard thereon. I find it difficult to ascribe either a want of wisdom or a lack of legal basis to
the early pronouncements of this Court that sanction the termination of employment when a just or an
authorized cause to warrant the termination is clearly extant. Regrettably, the Court in some of those
pronouncements has used, less than guarded in my view, the term “due process” when referring to the
notices prescribed in the Labor Code5 and its implementing rules6 that could, thereby, albeit
unintendedly and without meaning to, confuse the latter with the notice requirement in adjudicatory
proceedings. It is not seldom when the law puts up various conditions in the juridical relations of parties;
it would not
_______________
5 See Foonote 2.
6 Section 1, Rule XXIII, of the Rules Implementing the Labor Code clearly states that “(i)n cases of regular
employment, the employer shall not terminate the services of an employee except for just or authorized
causes as provided by law, and subject to the requirements of due process.”
Section 2, I, of the same Rule provides that in case of termination of employment based on just causes
under Article 282 of the Labor Code, is it required that there be
“(a)A written notice served on the employee specifying the ground or grounds for termination, and
giving to said employee reasonable opportunity within which to explain his side;
(b)A hearing or conference during which the employee concerned, with the assistance of counsel if the
employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the
evidence presented against him; and
(c)A written notice of termination served on the employee indicating that upon due consideration of all
the circumstances, grounds have been established to justify his ter-mination.”
In cases of termination based on authorized causes under Article 283 of the Labor Code, Section 2, II, of
the same Rule mandates that there be a “written notice to the employee and the appropriate Regional
Office of the Department (of Labor and Employment) at east thirty days before the effectivity of the
termination,” specifying the ground/s therefor.
528
528
be accurate to consider, I believe, an infraction thereof to ipso-facto raise a problem of due process. The
mere failure of notice of the dismissal or layoff does not foreclose the right of an employee from
disputing the validity, in general, of the termination of his employment, or the veracity, in particular, of
the cause that has been invoked in order to justify that termination. In assailing the dismissal or lay-off,
an employee is entitled to be heard and to be given the corresponding due notice of the proceedings. It
would be when this right is withheld without cogent reasons that, indeed, it can rightly be claimed that
the fundamental demands of procedural due process have been unduly discarded.
I do appreciate the fact that the prescribed notices can have consequential benefits to an employee who
is dismissed or laid off, as the case may be; its non-observance by an employer, therefore, can verily
entitle the employee to an award of damages but, to repeat, not to the extent of rendering outrightly
illegal that dismissal or lay-off predicated on valid grounds. I would consider the indemnification to the
employee not a penalty or a fine against the employer, the levy of either of which would require an
appropriate legislative enactment; rather, I take the grant of indemnity as justifiable as an award of
nominal damages in accordance with the provisions of Articles 2221-2223 of the Civil Code, viz.:
“Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been
violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him.
“Art. 2222. The court may award nominal damages in every obligation arising from any source
enumerated in article 1157, or in every case where any property right has been invaded.
“Art. 2223. The adjudication of nominal damages shall preclude further contest upon the right involved
and all accessory questions, as between the parties to the suit, or their respective heirs and assigns.”
There is no fixed formula for determining the precise amount of nominal damages. In fixing the amount
of nominal
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529
damages to be awarded, the circumstances of each case should thus be taken into account, such as, to
exemplify, the—
(a)length of service or employment of the dismissed employee;
(b)his salary or compensation at the time of the termination of employment vis-a-vis the capability of
the employer to pay;
(c)question of whether the employer has deliberately violated the requirements for termination of
employment or has attempted to comply, at least substantially, therewith; and/or
(d)reasons for the termination of employment.
I might stress the rule that the award of nominal damages is not for the purpose of indemnification for a
loss but for the recognition and vindication of a right. The degree of recovery therefor can depend, on
the one hand, on the constitution of the right, and, upon the other hand, on the extent and manner by
which that right is ignored to the prejudice of the holder of that right.
In fine7—
A.A just cause or an authorized cause and a written notice of dismissal or lay-off, as the case may be, are
required concurrently but not really equipollent in their consequence, in terminating an employer-
employee relationship.
B.Where there is neither just cause nor authorized cause, the reinstatement, of the employee and the
payment of back salaries would be proper and should be decreed. If the dismissal or lay-off is attended
by bad faith or if the employer acted in wanton or oppressive manner, moral and exemplary damages
might also be awarded. In this respect, the Civil Code provides:
“ART. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court
should find that, under the circumstances, such damages are justly due. The same rule applies
________________
7 See MGG Marine Services, Inc. v. NLRC, 259 SCRA 664.
530
530
to breaches of contract where the defendant acted fraudulently or in bad faith.”
“ART. 2232. In contracts and quasi-contracts, the court may award exemplary damages if the defendant
acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.” (Civil Code)
Separation pay can substitute for reinstatement if such reinstatement is not feasible, such as in case of a
clearly strained employer-employee relationship (limited to managerial positions and contracts of
employment predicated on trust and confidence) or when the work or position formerly held by the
dismissed employee plainly has since ceased to be available.
C. Where there is just cause or an authorized cause for the dismissal or lay-off but the required written
notices therefor have not been properly observed by an employer, it would neither be right and
justifiable nor likely intended by law to order either the reinstatement of the dismissed or laid-off
employee or the payment of back salaries to him simply for the lack of such notices if, and so long as,
the employee is not deprived of an opportunity to contest that dismissal or lay-off and to accordingly be
heard thereon. In the termination of employment for an authorized cause (this cause being attributable
to the employer), the laid-off employee is statutorily entitled to separation pay, unlike a dismissal for a
just cause (a cause attributable to an employee) where no separation pay is due. In either case, if an
employer fails to comply with the requirements of notice in terminating the services of the employee,
the employer must be made to pay, as so hereinabove expressed, corresponding damages to the
employee.
WHEREFORE, I vote to hold (a) that the lay-off in the case at bar is due to redundancy and that,
accordingly, the separation pay to petitioner should be increased to one month, instead of one-half
month, pay for every year of service, and (b) that petitioner is entitled to his unpaid wages,
proportionate 13th-month pay, and an indemnity of P10,000.00 in keeping with the nature and purpose
of, as well as the rationale behind, the grant of nominal damages.
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531
SEPARATE OPINION
PANGANIBAN, J.:
In the case before us, the Court is unanimous in at least two findings: (1) petitioner’s dismissal was due
to an authorized cause, redundancy; and (2) petitioner was notified of his dismissal only on the very day
his employment was terminated. The contentious issue arising out of these two findings is as follows:
What is the legal effect and the corresponding sanction for the failure of the employer to give the
employee and the Department of Labor and Employment (DOLE) the 30-day notice of termination
required under Article 283 of the Labor Code?
During the last ten (10) years, the Court has answered the foregoing question by ruling that the
dismissal should be upheld although the employee should be given “indemnity or damages” ranging
from P1,000 to P10,000 depending on the circumstances.
The present ponencia of Mr. Justice Mendoza holds that “the termination of his employment should be
considered ineffectual and the [employee] should be paid back wages” from the time of his dismissal
until the Court finds that the dismissal was for a just cause.
Reexamination of the “Indemnity Only” Rule
I am grateful that the Court has decided to reexamine our ten-year doctrine on this question and has at
least, in the process, increased the monetary award that should go to the dismissed employee—from a
nominal sum in the concept “indemnity or damages” to “full back wages.” Shortly after my assumption
of office on October 10, 1995, I already questioned this practice of granting “indemnity only” to
employees who were dismissed for cause but without due process.1 I formally
________________
1 See Panganiban, Battles in the Supreme Court, 1998 ed., p. 155 et seq.
532
532

registered reservations on this rule in my ponencia in MGG Marine Services v. NLRC2 and gave it full
discussion in my Dissents in Better Buildings v. NLRC3 and in Del Val v. NLRC.4
Without in any way diminishing my appreciation of this reexamination and of the more financially-
generous treatment the Court has accorded labor, I write to take issue with the legal basis of my
esteemed colleague, Mr. Justice Mendoza, in arriving at his legal conclusion that “the employer’s failure
to comply with the notice requirement does not constitute a denial of due process but a mere failure to
observe a procedure for the termination of employment which makes the termination of employment
merely ineffectual.” In short, he believes that (1) the 30-day notice requirement finds basis only in the
Labor Code, and (2) the sanction for its violation is only “full back wages.”
With due respect, I submit the following counter-arguments:
(1)The notice requirement finds basis not only in the Labor Code but, more important, in the due
process clause of the Constitution.
(2)Consequently, when the employee is dismissed without due process, the legal effect is an illegal
dismissal and the appropriate sanction is full back wages plus reinstatement, not merely full back wages.
It is jurisprudentially settled, as I will show presently, that when procedural due process is violated, the
proceedingsin this case, the dismissalwill be voided, and the parties will have to be returned to their
status quo ante; that is, the employee will have to be given back his old job and paid all benefits as if he
were never dismissed.
(3)In any event, contrary to Mr. Justice Mendoza’s premise, even the Labor Code expressly grants the
dis-
________________
2 259 SCRA 665, July 29, 1996.
3 283 SCRA 242, December 15, 1997. In that case, I proposed to grant separation pay in lieu of
reinstatement because, by the em-ployee’s acts, he had made reinstatement improper, a fact not
present in the instant case.
4 296 SCRA 283, September 28, 1998.

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VOL. 323, JANUARY 27, 2000
533
missed employee not only the right to be notified but alsothe right to be heard.
In short, when an employee is dismissed without notice and hearing, the effect is an illegal dismissal and
the appropriate reliefs are reinstatement and full back wages. In ruling that the dismissal should be
upheld, the Court majority has virtually rendered nugatory the employee’s right to due process as
mandated by law and the Constitution. It implicitly allows the employer to simply ignore such right and
to just pay the employee. While it increases the payment to “full back wages,” it doctrinally denigrates
his right to due process to a mere statutory right to notice.
Let me explain the foregoing by starting with a short background of our jurisprudence on the right to
due process.
Without Due Process, the Proceedings Are Illegal
In the past, this Court has untiringly reiterated that there are two essential requisites for an employer’s
valid termination of an employee’s services: (1) a just5 or authorized6 cause
________________
5 Art. 282 of the Labor Code provides:
“ART. 282. Termination by employer.—An employer may terminate an employment for any of the
following causes:
(e)Other causes analogous to the foregoing.”
6 Arts. 283 & 284 provide:
534
534
and (2) due process.7 During the last ten years, the Court has been quite firm in this doctrinal concept,
but it has been less than consistent in declaring the illegality of a dismissal when due process has not
been observed. This is particularly noticeable in the relief granted. Where there has been no just or
authorized cause, the employee is awarded reinstatement or
_______________
“ART. 283. Closure of establishment and reduction of personnel.—The employer may also terminate the
to prevent losses or the closing or cessation or operation of the establishment or undertaking unless the
closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the
workers and the [Department] of Labor and Employment at least one (1) month before the intended
date thereof. In case of termination due to the installation of labor saving devices or redundancy, the
worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay
or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment
to prevent losses and in cases of closures or cessation of operations of establishments or undertaking
not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1)
month pay or to at least one-half (1/2) month pay for every year of service, whichever is higher. A
fraction of at least six (6) months shall be considered one (1) whole year.
ART. 284. Disease as a ground for termination.—An employer may terminate the services of an
employee who has been found to be suffering from any disease and whose continued employment is
prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Provided,
That he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2) month
salary for every year of service, whichever is greater a fraction of at least six (6) months being
considered as one (1) whole year.”
7 Mapal v. NLRC, 233 SCRA 266, June 17, 1994; Ala Mode Garments, Inc. v. NLRC, 268 SCRA 497,
February 17, 1997; Pizza Hut/Progressive Development Corp. v. NLRC, 252 SCRA 531, January 29, 1996;
MGG Marine Services, Inc. v. NLRC, 259 SCRA 664, July 29, 1996; Ranises v. NLRC, 262 SCRA 671,
September 24, 1996.
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VOL. 323, JANUARY 27, 2000
535
separation pay, and back wages.8 If only the second requisite (due process) has not been fulfilled, the
employee, as earlier stated, is granted indemnity or damages amounting to a measly P1,000 up to
P10,000.9
I respectfully submit that illegal dismissal results not only from the absence of a legal cause (enumerated
in Arts. 282 to 284 of the Labor Code), but likewise from the failure to observe due process. Indeed,
many are the cases, labor or otherwise, in which acts violative of due process are unequivocally voided
or declared illegal by the Supreme Court. In Pepsi-Cola Bottling Co. v. NLRC,10 the Court categorically
ruled that the failure of management to comply with the requirements of due process made its
judgment of dismissal “void and non-existent.”
This Court in People v. Bocar11 emphatically made the following pronouncement, which has been
reiterated in several cases:12
“The cardinal precepts is that where there is a violation of basic constitutional rights, courts are ousted
of their jurisdiction. Thus the violation of the State’s right to due process raises a serious jurisdictional
issue (Gumabon vs. Director of the Bureau of Prisons, L-30026, 37 SCRA 420 [Jan. 30, 1971]) which
cannot be glossed over or disregarded at will. Where the denial of the fundamental right of due process
is apparent, a decision rendered in disregard of that right is void for lack of jurisdiction (Aducayen vs.
Flores, L-30370,
_______________
8 Conti v. NLRC, 271 SCRA 114; April 10, 1997; Alhambra Industries, Inc. v. NLRC, 238 SCRA 232,
November 18, 1994; JGB and Associates, Inc. v. NLRC, 254 SCRA 457, March 7, 1996; Samillano v. NLRC,
265 SCRA 788, December 23, 1996.
9 Alhambra Industries, Inc. v. NLRC, ibid.; Segismundo v. NLRC, 239 SCRA 167, December 13, 1994;
Sebuguero v. NLRC, 248 SCRA 532, September 27, 1995; Wenphil Corp. v. NLRC, 170 SCRA 69, February
8, 1989.
10 210 SCRA 277, 286, June 23, 1992, per Gutierrez, Jr., J.
11 138 SCRA 166, 170-171, August 16, 1985,” per Makasiar, CJ.
12 Among those are Galman v. Sandiganbayan, 144 SCRA 43, 87, September 12, 1986; People v. Albano,
163 SCRA 511; July 26, 1988; Saldana v. Court of Appeals, 190 SCRA 396, 403, October 11, 1990; Paulin v.
Gimenez, 211 SCRA 386, 392, January 21, 1993.
536
536

[May 25, 1973] 51 SCRA 78; Shell Co. vs. Enage, L-30111-12, 49 SCRA 416 [Feb. 27, 1973]). Any judgment
or decision rendered notwithstanding such violation may be regarded as a ‘lawless thing, which can be
treated as an outlaw and slain at sight, or ignored wherever it exhibits its head’ (Aducayen vs. Flores,
supra).”
In the earlier case Bacus v. Ople,13 this court also nullified the then labor minister’s clearance to
terminate the employment of company workers who had supposedly staged an illegal strike. The reason
for this ruling was the denial of sufficient opportunity for them to present their evidence and prove their
case. The Court explained:14
“A mere finding of the illegality of a strike should not be automatically followed by a wholesale dismissal
of the strikers from their employment. What is more, the finding of the illegality of the strike by
respondent Minister of Labor and Employment is predicated on the evidence ascertained through an
irregular procedure conducted under the semblance of summary methods and speedy disposition of
labor disputes involving striking employees.
While it is true that administrative agencies exercising quasijudicial functions are free from the rigidities
of procedure, it is equally well-settled in this jurisdiction that avoidance of such technicalities of law or
procedure in ascertaining objectively the facts in each case should not, however, cause a denial of due
process. The relative freedom of the labor arbiter from the rigidities of procedure cannot be invoked to
evade what was clearly emphasized in the landmark case of Ang Tibay v. Court of Industrial Relations
that all administrative bodies cannot ignore or disregard the fundamental and essential requirements of
due process.”
In the said case, the respondent company was ordered to reinstate the dismissed workers, pending a
hearing “giving them the opportunity to be heard and present their evidence.” In Philippine National
Bank v. Apalisok,15 Primitivo Virtudazo, an employee of PNB, was served a Memorandum stating the
finding against him of a prima facie case for dishonesty
________________
13 132 SCRA 690, October 23, 1984, per Cuevas, J.

14 Ibid., p. 703.
15 199 SCRA 92, July 12, 1991, per Narvasa, J. (later CJ).
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VOL. 323, JANUARY 27, 2000
537
and violation of bank rules and regulations. He submitted his Answer denying the charges and explaining
his defenses.
Later, two personnel examiners of the bank conducted a fact-finding investigation. They stressed to him
that a formal investigation would follow, in which he could confront and examine the witnesses for the
bank, as well as present his own. What followed, however, was a Memorandum notifying him that he
had been found guilty of the charges and that he was being dismissed. After several futile attempts to
secure a copy of the Decision rendered against him, he instituted against PNB a Complaint for illegal
dismissal and prayed for reinstatement and damages.
The trial court held that Virtudazo had been deprived of his rights to be formally investigated and to
cross-examine the witnesses. This Court sustained the trial court, stating resolutely: “The proceedings
having been conducted without according to Virtudazo the ‘cardinal primary rights of due process’
guaranteed to every party in an administrative or quasijudicial proceeding, said proceedings must be
pronounced null and void.”16
Also in Fabella v. Court of Appeals,17 this Court declared the dismissal of the schoolteachers illegal,
because the administrative body that heard the charges against them had not afforded them their right
to procedural due process. The proceedings were declared void, and the orders for their dismissal set
aside. We unqualifiedly reinstated the schoolteachers, to whom we awarded all monetary benefits that
had accrued to them during the period of their unjustified suspension or dismissal.
In People v. San Diego,18 People v. Sola,19 People v. Dacudao,20 People v. Calo, Jr.21 and People v.
Burgos,22 this Court
_________________
16 Ibid., p. 101.
17 282 SCRA 256, November 28, 1997.
18 26 SCRA 252, December 24, 1968.
19 103 SCRA 393, March 17, 1981.
20 170 SCRA 489, February 21, 1989.
21 186 SCRA. 620, June 18, 1990.
22 200 SCRA 67, August 2, 1991.
538
538

similarly voided the trial court’s grant of bail to the accused upon a finding that the prosecution had
been deprived of procedural due process.
In People v. Sevilleno23 the Court noted that the trial judge “hardly satisfied the requisite searching
inquiry” due the accused when he pleaded guilty to the capital offense he had been charged with. We
thus concluded that “the accused was not properly accorded his fundamental right to be informed of
the precise nature of the accusation leveled against him.” Because of the nonobservance of “the
fundamental requirements of fairness and due process,” the appealed Decision was annulled and set
aside, and the case was remanded for the proper arraignment and trial of the accused.
Recently, the Court vacated its earlier Decision24 in People v. Parazo25 upon realizing that the
accused“a deaf-mute, a mental retardate, whose mental age [was] only seven (7) years and nine (9)
months, and with low IQ of 60 only”had not been ably assisted by a sign language expert during his
arraignment and trial. Citing People v. Crisologo,26 we ruled that the accused had been deprived of “a
full and fair trial and a reasonable opportunity to defend himself.”—He had in effect been denied his
fundamental right to due process of law. Hence, we set aside the trial proceedings and granted the
accused a rearraignment and a retrial.
Of late, we also set aside a Comelec Resolution disallowing the use by a candidate of a certain nickname
for the purpose of her election candidacy. The Resolution was issued pursuant to a letter-petition which
was passed upon by the Comelec without affording the candidate the opportunity to explain her side
and to counter the allegations in said letter-petition. In invalidating the said Resolution, we again
underscored the
________________
23 GR No. 129058, March 29, 1999, 305 SCRA 29, per Bellosillo, J.
24 GR No. 121176, May 14, 1997, 272 SCRA 512.
25 July 8, 1999 Resolution on the Motion for Reconsideration, per Purisima, J.
26 150 SCRA 653, 656, June 17, 1987, per Padilla, J.

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539
necessity of the observance of the twin requirements of notice and hearing before any decision can be
validly rendered in a case.27
Clearly deducible from our extant jurisprudence is that the denial of a person’s fundamental right to due
process amounts to the illegality of the proceedings against him. Consequently, he is brought back to his
status quo ante, not merely awarded nominal damages or indemnity.
Our labor force deserves no less. Indeed, the State recognizes it as its primary social economic force,28
to which it is constitutionally mandated to afford full protection.29 Yet, refusing to declare the illegality
of dismissals without due process we have continued to impose upon the erring employer the simplistic
penalty of paying indemnity only. Hence, I submit that it is time for us to denounce these dismissals as
null and void and to grant our workers these proper reliefs: (1) the declaration that the termination or
dismissal is illegal and unconstitutional and (2) the reinstatement of the employee plus full back wages.
The present ruling of the Court is manifestly inconsistent with existing jurisprudence which holds that
proceedings held without notice and bearing are null and void, since they amount to a violation of due
process, and therefore bring back the parties to the status quo ante.
Exception: When Due Process Is Impractical and Futile
I am fully aware that in a long line of cases starting with Wenphil v. NLRC,30 the Court has held: where
there is just cause for the dismissal of an employee but the employer fails to follow the requirements of
procedural due process, the former is not entitled to back wages, reinstatement (or separation pay in
case reinstatement is no longer feasible) or other
________________
27 Villarosa v. Comelec, GR No. 133927, November 29, 1999, 319 SCRA 470.
28 § 18, Art. II, 1987 Constitution.
29 § 3, Art. XIII, ibid.
30 170 SCRA 69, February 8, 1989, per Gancayco, J.
540
540
benefits. Instead, the employee is granted an indemnity (or penalty or damages) ranging from P1,00031
to as much as P10,000,32 depending on the circumstances of the case and the gravity of the employer’s
omission. Since then, Wenphil has perfunctorily been applied in most subsequent cases33 involving a
violation of due process (although just cause has been duly proven), without regard for the peculiar
factual milieu of each case. Indemnity or damages has become an easy substitute for due process.
Be it remembered, however that the facts in Wenphil clearly showed the impracticality and the futility
of observing the procedure laid down by law and by the Constitution for terminating employment. The
employee involved therein appeared to have exhibited a violent temper and caused trouble during
office hours. In an altercation with a co-employee, he “slapped [the latter’s] cap, stepped on his foot and
picked up the ice scooper and brandished it against [him].” When summoned by the assistant manager,
the employee “shouted and uttered profane words” instead of giving an explanation. He was caught
virtually in flagrante delicto in the presence of many people. Under the circumstances obtaining, swift
action was necessary to preserve order and discipline, as well as to safeguard the customers’ confidence
in the employer’s busi-
________________
31 In Wenphil Corp. v. NLRC, ibid.; Sampaguita Garments Corp. v. NLRC, 233 SCRA 260, June 17, 1994;
Villarama v. NLRC, 236 SCRA 280, September 2, 1994; Rubberworld (Phils.), Inc. v. NLRC, 183 SCRA 421,
March 21, 1990; Kwikway Engineering Works v. NLRC, 195 SCRA 526, March 22, 1991, and several other
cases.
32 In Reta v. NLRC, 232 SCRA 613, May 27, 1994; and Alham-bra Industries, Inc. v. NLRC, 238 SCRA 232,
November 18, 1994.
33 Seahorse Maritime Corp. v. NLRC, 173 SCRA 390, May 15, 1989; Rubberworld (Phils.), Inc. v. NLRC,
supra; Carino v. NLRC, 185 SCRA 177, May 8, 1990; Great Pacific Life Assurance Corp. v. NLRC, 187 SCRA
694, July 23, 1990; Cathedral School of Technology v. NLRC, 214 SCRA 551, October 13, 1992; Aurelio v.
NLRC, 221 SCRA 432, April 12, 1993; Sampaguita Garments Corp. v. NLRC, 233 SCRA 260, June 17, 1994;
Villarama v. NLRC, supra.
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541
ness—a fast-food chain catering to the general public where courtesy is a prized virtue.
However, in most of the succeeding cases, including the present one before us in which the petitioner
was dismissed on the very day he was served notice, there were ample opportunities for the employers
to observe the requisites of due process. There were no exigencies that called for immediate response.
And yet, Wenphil was instantly invoked and due process brushed aside.
I believe that the price that the Court has set for the infringement of the fundamental right to due
process is too insignificant, too niggardly, and sometimes even too late. I believe that imposing a stiffer
sanction is the only way to emphasize to employers the extreme importance of the right to due process
in our democratic system. Such right is too sacred to be taken for granted or glossed over in a cavalier
fashion. To hold otherwise, as by simply imposing an indemnity or even “full back wages,” is to allow the
rich and powerful to virtually purchase and to thereby stifle a constitutional right granted to the poor
and marginalized.
It may be asked: If the employee is guilty anyway, what difference would it make if he is fired without
due process? By the same token, it may be asked: If in the end, after due hearing, a criminal offender is
found guilty anyway, what difference would it make if he is simply penalized immediately without the
trouble and the expense of trial? The absurdity of this argument is too apparent to deserve further
discourse.34
Worker’s Right to Notice Is Constitutional Not Merely Statutory
According to the ponencia of Mr. Justice Mendoza, the “violation of the notice requirement cannot be
considered a denial of due process resulting in the nullity of the employee’s
________________
34 See Concurring and Dissenting Opinion in Better Buildings, Inc. v. NLRC, 283 SCRA 242, 256,
December 15, 1997.
542
542
dismissal or lay-off.” He argues that the due process clause of the Constitution may be used against the
government only. Since the Labor Code does not accord employees the right to a hearing, ergo, he
concludes, they do not have the right to due process.
I disagree. True, as pointed out by Mr. Justice Mendoza, traditional doctrine holds that constitutional
rights may be invoked only against the State. This is because in the past, only the State was in a position
to violate these rights, including the due process clause. However, with the advent of liberalization,
deregulation and privatization, the State tended to cede some of its powers to the “market forces.”
Hence, corporate behemoths and even individuals may now be sources of abuses and threats to human
rights and liberties. I believe, therefore, that such traditional doctrine should be modified to enable the
judiciary to cope with these new paradigms and to continue protecting the people from new forms of
abuses.34-a
Indeed the employee is entitled to due process not because of the Labor code, but because of the
Constitution. Elementary is the doctrine that constitutional provisions are deemed written into every
statute, contract or undertaking. Worth noting is that “[o]ne’s employment, profession, trade or calling
is a property right within the protection of the constitutional, guaranty of due process of law.”35
In a long line of cases involving judicial, quasi-judicial and administrative proceedings, some of which I
summarized earlier, the Court has held that the twin requirements of notice and hearing (or, at the very
least, an opportunity to be heard) constitute the essential elements of due process. In labor
proceedings, both are the conditio sine qua non for a
________________
34-a See Panganiban, Leadership by Example, 1999 ed., pp. 60-61.
35 Wallem Maritime Services, Inc. v. NLRC, 263 SCRA 174, October 15, 1996; per Romero, J. Bernas, The
1987 Constitution of the Republic of the Philippines: A Commentary, 1996 ed., p. 101.
543
VOL. 323, JANUARY 27, 2000
543
dismissal to be validly effected.36 The perceptive Justice Irene Cortes has aptly stated: “One cannot go
without the other, for otherwise the termination would, in the eyes of the law, be illegal.”37
Even the Labor Code Grants the Right to a Hearing
Besides, it is really inaccurate to say that the Labor Code grants “notice alone” to employees being
dismissed due to an authorized cause. Article 277 (b)38 of the said Code explicitly provides that the
termination of employment by the employer
_______________
36 RCPI v. NLRC, 223 SCRA 656, June 25, 1993; Samillano v. NLRC, 265 SCRA 788, December 23, 1996.
37 San Miguel Corporation v. NLRC, 173 SCRA 314, May 12, 1989.
38 “Art. 277. x x x
“(b) Subject to the constitutional right of workers to security of tenure and their right to be protected
against dismissal except for a just and authorized cause and without prejudice to the requirement of
notice under Article 283 of this Code the employer shall furnish the worker whose employment is
sought to be terminated a written notice containing a statement of the causes for termination and shall
afford the latter ample opportunity to be heard and to defend himself with the assistance of his
representative if he so desires in accordance with company rules and regulations promulgated pursuant
to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall
be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing
a complaint with the regional branch of the National Labor Relations Commission. The burden of proving
that the termination was for a valid or authorized cause shall rest on the employer. The Secretary of the
Department of Labor and Employment may suspend the effects of the termination pending resolution of
the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor
and Employment before whom such dispute is pending that the termination may cause a serious labor
dispute or is in implementation of a mass lay-off.”
544
544

is “subject to constitutional right of workers to security of tenure[;] x x x without prejudice to the

requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose
employment is sought to be terminated a written notice containing a statement of the causes for
termination and shall afford the latter ample opportunity to be heard x x x.” Significantly, the provision
requires the employer “to afford [the employee] ample opportunity to be heard” when the termination
is due to a “just and authorized cause,” I submit that this provision on “ample opportunity to be heard”
applies to dismissals under Articles 282, 283 and 284 of the Labor Code.
In addition, to say that the termination is “simply ineffectual” for failure to comply with the 30-day
written notice and, at the same time, to conclude that it has “legal effect” appears to be contradictory.
Ineffectual means “having no legal force.”39 If a dismissal has no legal force or effect, the consequence
should be the reinstatement of the dismissed employee and the grant of full back wages thereto, as
provided by lawnot the latter only. Limiting the consequence merely to the payment of full back wages
has no legal or statutory basis. No provision in the Labor Code or any other law authorizes such
limitation of sanction, which Mr. Justice Mendoza advocates.
The majority contends that it is not fair to reinstate the employee, because the employer should not be
forced to accommodate an unwanted worker. I believe however that it is not the Court that forces the
employer to rehire the worker. By violating the latter’s constitutional right to due process, the former
brings this sanction upon itself. Is it unfair to imprison a criminal? No! By violating the law, one brings
the penal sanction upon oneself. There is nothing unfair or unusual about this inevitable chain of cause
and effect, of crime and punishment, of violation and sanction.
________________
39 The New World Dictionary, Second College Ed. (1974), defines effectual as “having legal force; valid.”
Thus, ineffectual, being its opposite, means having no legal force or not valid.
545
VOL. 323, JANUARY 27, 2000
545
Due Process Begins With Each of Us
To repeat, due process begins with the employer, not with the labor tribunals. An objective reading of
the Bill of Rights clearly shows that the due process protection is not limited to government action
alone. The Constitution does not say that the right cannot be claimed against private individuals and
entities. Thus, in PNB v. Apalisok, which I cited earlier, this Court voided the proceedings conducted by
petitioner bank because of its failure to observe Apalisok’s right to due process.
Truly, justice is dispensed not just by the courts and quasijudicial bodies like public respondent here. The
administration of justice begins with each of us, in our everyday dealings with one another and, as in this
case, in the employers’ affording their employees the right to be heard. If we, as a people and as
individuals, cannot or will not deign to act with justice and render unto everyone his or her due in little,
everyday things, can we honestly hope and seriously expect to do so when monumental, life-or-death
issues are at stake? Unless each one is committed to a faithful observance of day-to-day fundamental
rights, our ideal of a just society can never be approximated, not to say attained.
In the final analysis, what is involved here is not simply the amount of monetary award, whether
insignificant or substantial; whether termed indemnity, penalty or “full back wages.” Neither is it merely
a matter of respect for workers’ rights or adequate protection of labor. The bottom line is really the
constitutionally granted right to due process. And due process is the very essence of justice itself. Where
the rule of law is the bedrock of our free society, justice is its very lifeblood. Denial of due process is thus
no less than a denial of justice itself.
546
546
Serrano, vs. National Labor Relations Commission
In Addition to Reinstatement and Back Wages, Damages May Be Awarded

One last point. Justice Vitug argues in his Separate Opinion that the non-observance of the prescribed
notices “can verily entitle the employee to an award of damages but x x x not to the extent of rendering
outrightly illegal that dismissal or lay-off x x x.” I, of course, disagree with him insofar as he denies the
illegality of the dismissal, because as I already explained, a termination without due process is
unconstitutional and illegal. But I do agree that, where the employee proves the presence of facts
showing liability for damages (moral, exemplary, etc.) as provided under the Civil Code, the employee
could be entitled to such award in addition to reinstatement and back wages. For instance, where the
illegal dismissal has caused the employee “physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury” due to the
bad faith of the employer, an award for moral damages would be proper, in addition to reinstatement
and back wages.
Summary
To conclude, I believe that even if there may be a just or an authorized cause for termination but due
process is absent, the dismissal proceedings must be declared null and void. The dismissal should still be
branded as illegal. Consequently, the employee must be reinstated and given full back wages.
On the other hand, there is an exception. The employer can adequately prove that under the peculiar
circumstances of the case, there was no opportunity to comply with due process requirements; or doing
so would have been impractical or gravely adverse to the employer, as when the employee is caught in
flagrante delicto. Under any of these circumstances, the dismissal will not be illegal and no award may
properly be granted. Nevertheless, as a measure of compassion, the em-
547
VOL. 323, JANUARY 27, 2000
547
People vs. Borromeo
ployee may be given a nominal sum depending on the circumstances, pursuant to Article 2221 of the
Civil Code. Depending on the facts of each case, damages as provided under applicable articles of the
Civil Code may additionally be awarded.
WHEREFORE, I vote to GRANT the petition. Ruben Serrano should be REINSTATED and PAID FULL BACK
WAGES from date of termination until actual reinstatement, plus all benefits he would have received as
if he were never dismissed.
Petition granted, resolution modified. Case remanded to Labor Arbiter for computation of separation
pay, backwages and other monetary awards.
Note.—The requisites before an employee can be validly dismissed are: a) the employee must be
afforded due process and b) the dismissal must be for any of the causes specified in Article 282 of the
Labor Code. (Mirano vs. National Labor Relations Commission, 270 SCRA 96 [1997])
——o0o——
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Commission, 323 SCRA 445, G.R. No. 117040 January 27, 2000

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VOL.

323, JANUARY 27, 2000

Serrano vs. National Labor Relations Commission

G.R. No. 117040. January 27, 2000.*

Serrano vs. National Labor Relations Commission

Serrano vs. National Labor Relations Commission

SUPREME COURT REPORTS ANNOTATED

Serrano vs. National Labor Relations Commission

VOL. 323, JANUARY 27, 2000

Serrano vs. National Labor Relations Commission

BELLOSILLO, J., Separate Opinion:

SUPREME COURT REPORTS ANNOTATED

Serrano vs. National Labor Relations Commission

VOL. 323, JANUARY 27, 2000

Serrano vs. National Labor Relations Commission

SUPREME COURT REPORTS ANNOTATED

Serrano vs. National Labor Relations Commission

PUNO, J., Dissenting Opinion:

VOL. 323, JANUARY 27, 2000

Serrano vs. National Labor Relations Commission

VITUG, J., Separate Opinion:

SUPREME COURT REPORTS ANNOTATED

Serrano vs. National Labor Relations Commission

VOL. 323, JANUARY 27, 2000

Serrano vs. National Labor Relations Commission

SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.

The facts are stated in the opinion of the Court.

Buenaluz, Urbano Law Office for petitioner.

Romeo Batino for private respondent.

Serrano vs. National Labor Relations Commission

October 11, 1991

MR. RUBEN SERRANO

Dear Mr. Serrano,

Very truly yours,

[Sgd.] TERESITA A. VILLANUEVA

Human Resources Division Manager

1 TSN of testimony of petitioner, pp. 24, 76-78, April 24, 1992.

2 Petitioner’s Position Paper, Annex C; Records, p. 19.

3 Id., AnnexB; id., p. 21.

VOL. 323, JANUARY 27, 2000

Serrano vs. National Labor Relations Commission

Accordingly, the Labor Arbiter ordered:6

WHEREFORE, above premises considered, judgment is hereby decreed:

6 Id., pp. 35-36.

SUPREME COURT REPORTS ANNOTATED

Serrano vs. National Labor Relations Commission

VOL. 323, JANUARY 27, 2000

Hence this petition. Petitioner raises the following issue:

Petitioner Laid Off for Cause

Petitioner’s contention has no merit. Art. 283 provides:

SUPREME COURT REPORTS ANNOTATED

Serrano vs. National Labor Relations Commission

10 G.R. No. 131108, March 25, 1999, 305 SCRA 416.

VOL. 323, JANUARY 27, 2000

Serrano vs. National Labor Relations Commission

Court will not interfere with the exercise of judgment by an employer.12

13 TSN, p. 61, April 24, 1992.

14 CONST., ART. XIII, §3.

15 E.g., Aurora Land Projects Corporation v. NLRC, 266 SCRA 48 (1997).

SUPREME COURT REPORTS ANNOTATED

Serrano vs. National Labor Relations Commission

16 248 SCRA 532 (1995).

(b)Gross and habitual neglect by the employee of his duties;