118391-2000-Serrano v. National Labor Relations20210905-12-1jkp6f0

EN BANC
[G.R. No. 117040. January 27, 2000.]
RUBEN SERRANO, petitioner, vs. NATIONAL LABOR

RELATIONS COMMISSION and ISETANN DEPARTMENT
STORE, respondents.
Buenaluz Urbano Law Office for petitioner.

The Solicitor General for public respondent.
Romeo Batino for private respondent.
SYNOPSIS
Petitioner Ruben Serrano, head of the Security Checkers Section of

Isetann, herein private respondent, was served with a letter dated October 11,
1991 informing him of his termination effective on the same date on the ground
of retrenchment to the effect that the company will phase out its entire security
section and engage the services of an independent security agency. In a
complaint for illegal dismissal filed against Isetann by petitioner, the Labor
Arbiter found, among others, that Isetann failed to establish that retrenchment
was resorted to in order to prevent or minimize losses to its business and that it
failed to accord petitioner due process for failure to serve prior notice. Isetann
was ordered to reinstate and pay petitioner full backwages without qualification
or deduction computed from the time of his dismissal until reinstatement. On
appeal, the Labor Arbiter's decision was reversed. The NLRC held that the
phaseout of the section and the hiring of an independent security agency
constituted a legitimate business decision. Isetann was ordered to pay
petitioner separation pay equivalent to one month for every year of service. A
motion for reconsideration filed by petitioner was, denied, hence this petition.
The Supreme Court held that an employee's termination on ground of
redundancy or reduction of personnel is valid, the same being an exercise of an
employer's business judgment or management prerogative and the Court, in
the absence of proof that management acted in a malicious or arbitrary
manner, will not interfere with the valid exercise of judgment by an employer.
Failure of an employer to comply with the requirement of prior notice

under Article 283 of the Labor Code is not a denial of due process as it does not
foreclose the right of the latter to question the legality of his dismissal. It is but
a failure to observe a procedure for the termination of employment which
makes the termination of employment merely ineffectual which renders the
employer liable to the payment of separation pay equivalent to one (1) month
pay for every year of service and full backwages.
SYLLABUS
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1. REMEDIAL LAW; EVIDENCE; FACTUAL FINDINGS OF ADMINISTRATIVE
AGENCY THAT PHASE-OUT OF SECURITY SECTION CONSTITUTED "A LEGITIMATE
BUSINESS DECISION," ACCORDED RESPECT AND EVEN FINALITY BY THIS
COURT. — 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.
2. LABOR AND SOCIAL LEGISLATION; LABOR CODE; TERMINATION OF
EMPLOYMENT; EMPLOYER MUST BE SANCTIONED WHERE EMPLOYEE VALIDLY
DISMISSED WAS NOT FURNISHED TWIN REQUIREMENTS OF NOTICE AND
OPPORTUNITY TO BE HEARD. — 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."
3. CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS; DOES NOT

APPLY TO EXERCISE OF PRIVATE POWER. — 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.
EMPLOYMENT; NOTICE AND HEARING, PURPOSE. — 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.EHTIcD
5. ID.; ID.; ID.; ID.; NON-COMPLIANCE THEREWITH DOES NOT CONSTITUTE

DENIAL OF DUE PROCESS. — 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.

6. ID.; ID.; ID.; ID.; ID.; DOES NOT MAKE DISMISSAL ILLEGAL. — Under the
Labor Code, only the absence of a just cause for the termination of employment
can make the dismissal of an employee illegal. This is clear from Art. 279.
7. ID.; ID.; ID.; ID.; APPLICABLE RULES. — 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. 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.
BELLOSILLO, J., separate opinion:
1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYMENT;

TERMINATION THEREOF; JUST CAUSES. — 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.
2. ID.; ID.; ID.; AUTHORIZED CAUSES. — 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. ID.; ID.; ID.; SEPARATION PAY; BASIS OF COMPUTATION. — 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.
4. ID.; ID.; ID.; REDUNDANCY; WHEN IS A POSITION CONSIDERED

REDUNDANT. — 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.
5. ID.; ID.; LABOR RELATIONS HIRING OF INDEPENDENT SECURITY

AGENCY, AN EXERCISE OF MANAGEMENT PREROGATIVE. — 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. 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.
6. ID.; ID.; TERMINATION OF EMPLOYMENT; SECURITY OF TENURE; DOES
NOT GUARANTEE PERPETUAL EMPLOYMENT. — 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.
7. ID.; ID.; TERMINATION OF EMPLOYMENT; REDUNDANCY; EMPLOYMENT;
30-DAY NOTICE REQUIREMENT; PURPOSE. — 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. 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.
8. ID.; ID.; ID.; ID.; ID.; NON-COMPLIANCE THEREWITH DOES NOT
CONSTITUTE DENIAL OF DUE PROCESS. — 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 non-compliance with
the provision on notice under Art. 283 of the Labor Code.
9. CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS; REQUIREMENT

FOR VALIDITY OF GOVERNMENTAL ACTION AMOUNTING TO DEPRIVATION OF
LIBERTY AND PROPERTY. — Due process is a requirement for the validity of any
governmental action amounting to deprivation of liberty or property. 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.
10. ID.; ID.; ID.; REQUIREMENTS IN ADMINISTRATIVE PROCEEDINGS. —
The cardinal primary requirements of due process in administrative
proceedings were highlighted in Ang Tibay v. Court of Industrial Relations: (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. DAcaIE
11. ID.; ID.; ID.; ESSENCE THEREOF IN ADMINISTRATIVE PROCEEDINGS. —

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. (Lumiqued v. Exevea, G.R. No. 117665, 18 November
1997, 282 SCRA 146-147)
EMPLOYMENT; 30-DAY NOTICE REQUIREMENT; DISMISSAL WITHOUT NOTICE,
THOUGH IRREGULAR, VALID; EMPLOYER LIABLE FOR DAMAGES. — 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.
13. ID.; ID.; ID.; BENEFITS DUE TO EMPLOYEE DISMISSED WITHOUT

REQUIRED 30-DAY NOTICE. — 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.
PANGANIBAN, J., separate opinion:

EMPLOYMENT; ESSENTIAL REQUISITES FOR AN EMPLOYER'S VALID
TERMINATION OF AN EMPLOYEE'S SERVICES. — 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.
2. CONSTITUTIONAL LAW; CONSTITUTIONAL RIGHTS; TRADITIONALLY
INVOKED AGAINST THE STATE. — 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.
3. ID.; BILL OF RIGHTS; DUE PROCESS; EMPLOYEE ENTITLED THERETO;

RATIONALE. — 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." 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. Truly, justice is dispensed not just by the courts and
quasi-judicial 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 employer's affording their employees the right to be heard.
4. LABOR AND SOCIAL LEGISLATION; DUE PROCESS; TWIN
REQUIREMENTS OF NOTICE AND HEARING; A CONDITIO SINE QUA NON IN
TERMINATION OF EMPLOYEES. — In a long line of cases involving judicial, quasi-
judicial and administrative proceedings 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."
5. ID.; LABOR CODE; TERMINATION OF EMPLOYMENT; NOTICE AND

HEARING, REQUIRED. — 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) of the said Code explicitly provides that the termination of
employment by the employer is "subject to the constitutional right of workers to
security of tenure[;] . . . 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 . . . ." 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.
6. ID.; ID.; ID.; ID.; VIOLATION THEREOF ENTITLES EMPLOYEE TO
DAMAGES. — 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.
7. ID.; ID.; ID.; TERMINATION WITHOUT DUE PROCESS, NULL AND VOID;
EXCEPTION. — 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 employee 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.
VITUG, J., concurring and dissenting opinion
1. CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS OF LAW;

CONCEPT. — 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 meaningful adjudications appurtenant thereto. DEHaAS
2. ID.; ID.; DUE PROCESS REQUIREMENT IN LABOR CASES; ASPECTS. —

Due process in the context of a termination of employment 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.

EMPLOYMENT; VALID CAUSE AND WRITTEN NOTICE, REQUIRED CONCURRENTLY
BUT NOT EQUIPOLLENT IN THEIR CONSEQUENCE. — 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.
4. ID.; ID.; ID.; EMPLOYEE ILLEGALLY DISMISSED ENTITLED TO
REINSTATEMENT AND BACKWAGES; MORAL AND EXEMPLARY DAMAGES ALSO
AWARDED WHERE DISMISSAL WAS IN BAD FAITH. — 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.
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.
5. ID.; ID.; ID.; LEGALLY DISMISSED EMPLOYEE, WITHOUT PRIOR NOTICE,
ENTITLED TO SEPARATION PAY AND DAMAGES. — 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 hereinabove expressed, corresponding damages to the employee.

PUNO, J., dissenting opinion:
1. CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS; PROCEDURAL
DUE PROCESS; ESSENCE. — The rule of audi alteram partem — hear the other
side, is the essence of procedural due process. That a "party is not to suffer in
person or in purse without an opportunity of being heard" is the oldest
established principle in administrative law.

EMPLOYMENT; TERMINATION FOR JUST CAUSE, NOTICE REQUIRED. — 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.
3. ID.; ID.; ID.; RETRENCHMENT; NOTICE REQUIREMENT, MANDATORY. —
In Sebuguero v. NLRC, 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."
4. ID.; ID.; ID.; ID.; PURPOSE OF PRIOR NOTICE REQUIREMENT. — The
stubborn refusal of the majority to appreciate the importance of pre-dismissal
notice is difficult to understand. It is the linchpin of an employee's 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.
5. ID.; ID.; ID.; AUTHORIZED CAUSES FOR TERMINATION; NOTICE,

REQUIRED; REASON. — Article 283 of the Labor Code 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 dismissal — one 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. We
explained that the notice to the DOLE is necessary to enable it to ascertain the
truth of the cause of termination. 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. 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. In
addition, this notice requirement gives an employee a little time to adjust to his
joblessness.
6. CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS; PRIVATE DUE

PROCESS; NOT MERELY A LIMITATION ON GOVERNMENTAL POWERS BUT ALSO
ON PRIVATE ACTIONS. — 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.
Today, private due process is a settled norm in administrative law. 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 ISETANN.
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. (Kingsize Manufacturing Corporation vs. NLRC). 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 article —
Section 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. AcDHCS
7. ID.; ID.; ID.; PRE-DISMISSAL NOTICE, PART THEREOF. — The pre-

dismissal notice requirement is part of due process. In Batangas Laguna
Tayabas Bus Co. vs. Court of Appeals , 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. . . . . 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 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.
EMPLOYMENT; EMPLOYER NOT CALLED UPON TO ACT AS IMPARTIAL JUDGE. —
In an Article 283 situation, dismissal due to an authorized cause, the employer
is not called upon to act as an impartial judge. The employer is given the duty
to serve a written notice on the worker and the DOLE at least one month before
the intended date of lay-off. It is the DOLE, an impartial agency that will judge
whether or not the employee is being laid off for an authorized caused. It is not
the employer who will adjudge whether the alleged authorized cause for
dismissing the employee is fact or fiction. On the other hand, in an Article 282
situation, dismissal for a just cause, it is also incorrect to hold that an employer
cannot be an impartial judge. Today, the procedure on discipline and dismissal
of employees 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 act 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.
9. ID.; ID.; ID.; PRE-DISMISSAL NOTICE REQUIREMENT; NOT AN
APPLICATION OF JUSTINIAN PRECEPT BUT A LABOR CODE PROVISION. — 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 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 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.
10. ID.; ID.; ID.; LEGAL RELATIONSHIP OF EMPLOYER TO HIS EMPLOYEE,

NOT SIMILAR TO THAT OF VENDOR AND VENDEE. — 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 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."
11. ID.; ID.; ID.; EMPLOYEES PROTECTED NOT ONLY AGAINST UNJUST
CAUSES BUT ALSO FOR UNAUTHORIZED CAUSES OF TERMINATION. — 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.
It is then rationalized that "to hold that the employer's failure to give notice
before dismissing an employee . . . 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.
DECISION

MENDOZA, J : p
This is a petition seeking review of the resolutions, dated March 30, 1994
and August 26, 1994, of the National Labor 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: Cdpr
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 effective 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
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. cdlex
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 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. cdrep
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 supervisor 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: cdll
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. cdrep
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
I n 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 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 cda
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 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 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
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.
xxx xxx xxx

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. prLL
The fines imposed for violations of the notice requirement have varied
from P1,000.00 22 to P2,000.00 23 to P5,000.00 24 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. Consequently, in their view, the employee concerned
should be reinstated and paid backwages. aisadc
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, 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 Sengbengco 26 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.
Bocar 27 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 Justices Puno and Panganiban refer, however, to
the denial of due process by the State, which is not 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. prcd
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 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
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 can not 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).
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
we 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 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. ELC
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 34 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 dismissal 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 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. cdll
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.
Unjust Results of Considering Dismissals/
Layoffs Without Prior Notice As Illegal
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
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) 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. cdrep
SO ORDERED.
Davide, Jr., C.J., Melo, Kapunan, Quisumbing, Purisima, Pardo, Buena,

Gonzaga-Reyes and De Leon, Jr., JJ., concur.
Bellosillo, Vitug,and Panganiban, JJ., see separate opinion.
Puno, J., see dissenting opinion.
Ynares-Santiago, J., joins the dissenting opinion of J. Puno.
Separate Opinions
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 Appeals for proper adjudication. LGM
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 certiorari 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 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 reconsideration 3 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. CDta
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.
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
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 Court 6 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. LLpr
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 —
ARTICLE 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 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 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 non-compliance 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 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."
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. Exevea 19 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. Llibris
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.
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. NLRC 20 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 . . . 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 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 Commission 21 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 non-
compliance 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 Commission 22 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 . . . We affirm the finding of the public respondent that there
was just cause to dismiss petitioner, a probationary employee (italics
supplied). dctai
Also, in Camua v. National Labor Relations Commission 23 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. . . . Accordingly, in accordance with the well-
settled rule, private respondents should pay petitioner P1,000.00 as
indemnity for violation of his right to due process. . . 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
distinguished 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. RHLY

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 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 infraction — of not complying with the 30-day
written notice requirement — to 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 disturbance
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.
Indeed, from the time the employee is dismissed from the service without
notice — in this case since 11 October 1991 — to the termination of his case,
assuming it results in his reinstatement, 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 income — his employment — for 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 usury —
to which he must have succumbed — during 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 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
w h i c h 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. CDta
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. CDTInc
The present ponenciaof 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 registered reservations on this rule in my
ponencia in MGG Marine Services v. NLRC 2 and gave it full discussion in my
Dissents in Better Buildings v. NLRC 3 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 proceedings — in this case, the dismissal — will
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 dismissed employee not
only the right to be notified but also the 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. SDML
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
just 5 or authorized 6 cause 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 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. Bocar 11 emphatically made the following

pronouncement, which has been reiterated in several cases: 12
"The cardinal precept 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, [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)." cda
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. SDML
While it is true that administrative agencies exercising quasi-

judicial 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."
I n 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 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. LLphil
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 quasi-judicial 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 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.
I n People v. Sevilleno , 23 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 Decision 24 i n People v. Parazo 25

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 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. cdrep
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
hearing 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 withWenphil 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 benefits. Instead, the
employee is granted an indemnity (or penalty or damages) ranging from P1,000
31 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 cases 33 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. cdrep
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
business — a fast food chain catering to the general public where courtesy is a
prized virtue. Llibris
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 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. cdphil
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 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 is "subject to the constitutional right of workers to security of
tenure[;] . . . 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 . . .."
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. llcd
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 law — not 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.
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 quasi-judicial 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. LexLib
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 .
In Addition to Reinstatement and
Back Wages, Damages May Be Awarded
One last point. Justice Vitug argues in his Separate Opinion that the
nonobservance of the prescribed notices "can verily entitle the employee to an
award of damages but . . . not to the extent of rendering outrightly illegal that
dismissal or lay-off . . ." 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 employee may be given a nominal sum depending
on the circumstances, pursuant to Article 2221 of the Civil Code. llcd
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.
VITUG, J.,separate concurring and dissenting opinion:
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 282 1 and
the authorized causes under Article 283 2 and Article 284. 3
An employee whose employment is terminated for a just cause is not
entitled to the payment of separation benefits. 4 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. LLpr
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 meaningful
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,
a n d 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. 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 Code 5 and its implementing rules 6 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 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 lay-off 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.
CDTInc
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.:
"ARTICLE 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.
"ARTICLE 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.
"ARTICLE 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 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) h i s salary or compensation at the time of the termination of

employment vis-a-vis the capability of the employer to pay; CDta
(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 fine 7 —
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: CDta
"ARTICLE 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 to
breaches of contract where the defendant acted fraudulently or in bad
faith."
"ARTICLE 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.
The rule of audi alteram partem — hear the other side, is the essence of
procedural due process. That a "party is not to 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. LLcd
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:
"ARTICLE 282. 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 the 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 cdtai
(e) Other causes analogous to the foregoing."
The long established jurisprudence 2 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. 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. LLjur
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 of grave misconduct and 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.
O n 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. cdasia
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.
prLL
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 can not 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 been 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:
"ARTICLE 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 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 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. cdlex
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 non-
compliance 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 . v. 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
T h e 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."
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
h e a r i n g 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 processof 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 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 pre-dismissal 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. LexLib
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 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 not
even concern due process. The reasons relied upon by the majority for this new
ruling against the job security of employees cannot inspire assent. LLjur
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 ground
— retrenchment. 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 ascertain 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 ISETANN . 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
"xxx xxx xxx
Atty. Perdigon:
You said that your company decided to phase out the position of
security checkers . . .
Ms. Ramos:
Yes Sir.
Q: And instead hired the services of a security agency?
A: Yes, sir.
xxx xxx xxx
Q: Did you not retrench the position of security checkers?
A: We installed a labor saving device. cdll
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 xxx 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 (italics
supplied).
xxx xxx xxx
Q: . . . 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. cdlex
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 . . . 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 ISETANN's phase out of its security employees is a legitimate 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 re-examining the
Wenphil doctrine. At the very least, I thought 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. cda
The stubborn refusal of the majority to appreciate the importance of pre-

dismissal notice is difficult to understand. It is the linchpin of an employee's
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. 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. aisadc
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 dismissal — one 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
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 pre-dismissal
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. LexLibris
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 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 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. ELC
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. Senbengco 17 that ". . . 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 prejudgment 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.
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 thenew

majority ruling that due process restricts government alone and not private
employers like ISETANN . 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:
". . . (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.
"The notice required, . . ., 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. LGM
"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. . . ." 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
article — Section 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, 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
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: RBR
"ARTICLE 277. Miscellaneous provisions. — (a) . . ..

"(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. . . .."
Previous to the amendment, Article 277 (b) read:

"ARTICLE 277. Miscellaneous provisions. — (a) . . ..
"(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 1997 Omnibus Rules Implementing the Labor
Code provides:
"Termination of Employment
"SECTION 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.
"SECTION 2. Notice of dismissal. — Any employer who seeks to
dismiss a worker shall furnish him a written notice stating the particular
acts or omissions constituting the grounds for his dismissal. . . .
xxx xxx xxx
"SECTION 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. . . ..
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: SDML
"ARTICLE 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
can not be deprived of his labor or work without due process of law. . . .
(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:
"SECTION 2. Standards of due process: requirements of notice. —
I n 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
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
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 ground or grounds
for termination."
The new ruling af the majority is not in consonance with this Rule XXIII. Llibris
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 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 to dismiss an employee without any prior hearing and say let him
be heard later on. To a dismissed employee that remedy is too little and too
late. The new majority ruling is doubly to be regretted because it comes at a
time when deregulation and privatization are buzzwords in the world being
globalized. In such a setting, the new gods will not be governments but non-
governmental corporations. The greater need of the day therefore is
protection from illegal dismissals sans due process by these non-
governmental corporations. LLpr
The majority also holds that the "third reason why the notice requirement
under Art. 283 is not a requirement of due process 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."
Again, with due respect, I beg to disagree. In an Article 283 situation, dismissal
due to an authorized cause, the employer is not called upon to act as an
impartial judge. The employer is given the duty to serve a written notice on the
worker and the DOLE at least one month before the intended date of lay-off. It
is the DOLE, an impartial agency that will judge whether or not the employee is
being laid off for an authorized caused. 27 It is not the employer who will
adjudge whether the alleged authorized cause for dismissing the employee is
fact or fiction. On the other hand, in an Article 282 situation, dismissal for a just
cause, it is also incorrect to hold that an employer cannot be an impartial
judge. Today, the procedure on discipline and dismissal of employees 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 act 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.
LLjur
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 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 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. prcd
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 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 . . . 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 dismissing employees. Needless to state, it is incorrect for the majority
to urge that we are in effect amending Article 279. Cdpr
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 employee — under 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 a n d better legal treatment to our
employees in their relationship with their employer. Expressive 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 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."' 28
This ingrained social philosophy favoring employees has now been

weakened by the new ruling of the majority. For while 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 non-compliance
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 this consequence as unjust
to the employer and it merely winks at his failure to give notice. LexLib
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 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. cdasia
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. cdrep
Footnotes
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., Annex B; id., p. 21.
4. Records, p. 2.
5. Decision, dated April 30, 1993, of Labor Arbiter Pablo C. Espiritu. Petition, Annex
A; Rollo, p. 30.
6. Id., pp. 35-36.
7. Petition, p. 10; id., p. 16.
8. 213 SCRA 652 (1992).
9. Id., at 662.
10. G.R. No. 131108, March 25, 1999.
11. Shell Oil Workers Union v. Shell Company of the Philippines, Ltd., 39 SCRA 276,
284-285 (1971).
12. Asian Alcohol Corporation v. National Labor Relations Commission, G.R. No.
131108, March 25, 1999.
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).
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;
(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.
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.
20. 170 SCRA 69 (1989).
21. Id., at 75-76.

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).
26. 110 Phil. 113, 118 (1960).

27. 138 SCRA 166, 170 (1985).
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 six 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.
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).
31. 71 SCRA 470, 480 (1976).
32. 77 SCRA 321 (1977).

33. CIVIL CODE, Art. 19.
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.
37. Italics 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;
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).

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).
BELLOSILLO, J.:
1. G.R. No. 130866, 16 September 1998, 295 SCRA 494.
2. Exh. "B", Records, p. 21.

3. Rollo, p. 63.
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.
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.
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 . . . 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 . . .
12. Sec. 1, Art. III, 1987 Constitution.
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.

18. 69 Phil. 635 (1940).
19. G.R. No. 117565, 18 November 1997, 282 SCRA 146-147.
20. G.R. No. 80587, 8 February 1989, 170 SCRA 69.
22. G.R. No. 122666, 19 June 1997, 274 SCRA 379.

24. Shoemart, Inc. v. NLRC, G.R. No. 74229, 11 August 1989, 176 SCRA 385 — The
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 617 — The 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 432 — The 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 125 — The 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.
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.
26. See Note 21.
PANGANIBAN, J.:
1. See Panganiban, Battles in the Supreme Court, 1998 ed., p. 155 et seq.
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 employee's acts, he had made
reinstatement improper, a fact not present in the instant case.
4. 296 SCRA 283, September 28, 1998.

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:

representative; and
(e) Other causes analogous to the foregoing."
6. Arts. 283 & 284 provide:
"ART. 283. Closure of establishment and reduction of personnel. — The employer
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. Mapalo 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.
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, C.J.
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, 217
SCRA 386, 392, January 21, 1993.
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).
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.
23. G.R. No. 129058, March 29, 1999, per Bellosillo, J.
24. G.R. No. 121179, May 14, 1997.
25. July 8, 1999 Resolution on the Motion for Reconsideration, per Purisima, J.
26. 150 SCRA 653, 656, June 17, 1987, per Padilla, J.
27. Villarosa v. Comelec, G.R. No. 133927, November 29, 1999.
28. § 18, Art. II, 1987 Constitution.
29. § 3, Art. XIII, ibid.
30. 170 SCRA 69, February 8, 1989, per Gancayco, J.
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 Alhambra 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; Cariño 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.
34. See Concurring and Dissenting Opinion in Better Buildings, Inc. v. NLRC , 283
SCRA 242, 256, December 15, 1997.
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.
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. . . . . . . . . .
"(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."
39. T h e 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.
VITUG, J., separate concurring and dissenting opinion:
1. ART. 282. Termination by employer . — An employer may terminate an
employment for any of the following causes:

representative; and
(e) Other causes analogous to the foregoing.
2. ART. 283. Closure of establishment and reduction of personnel. — The employer
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 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.
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
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 agreement with the
employer or voluntary employer policy or practice."
5. See Footnote 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 termination."

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 least thirty days before the
effectivity of the termination," specifying the ground/s therefor.
7. See MGG Marine Services, Inc. vs. NLRC, 259 SCRA 664.

1. Schwartz, Administrative Law, 1991 ed., p. 224 citing Painter v. Liverpool Gas
Co., 3 Ad. & E I. 433, 449, 11 Eng. Rep. 478 (K. B. 1836).
2. Kingsize Manufacturing Corp. vs. NLRC, 238 SCRA 349 (1994).
3. Ibid.
4. 170 SCRA 69.

5. 248 SCRA 532, 545 (1995).
6. Ibid. , p. 546.
7. Op. cit., p. 76.
8. Op. cit., pp. 74-75.
9. Op. cit., p. 76.
10. TSN, August 4, 1992, pp. 30, 37-38, 42-49.
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).
17. 110 Phil. 113 (1960).
18. Schwartz, op. cit., pp. 273-274.

19. Supra.
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.
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 representative in connection with his work;
(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. . . .
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
prejudicial to his health as well as to the health of his co-employees . . . .
24. The adjustment of the numbering of the Articles is due to the fact that there
are two (2) Article 238.
25. 71 SCRA 470 (1976).
26. 92 Phil. 843 (1953).
27. International Hardware, Inc. vs. NLRC, 176 SCRA 256 (1989); Sebuguero v.
NLRC, supra.
28. Concurring opinion in Ang Tibay et al. vs. Court of Industrial Relations, et al., 69
Phil. 635 (1940).

118391-2000-Serrano v. National Labor Relations20210905-12-1jkp6f0

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EN BANC

[G.R. No. 117040. January 27, 2000.]

RUBEN SERRANO, petitioner, vs. NATIONAL LABOR

Buenaluz Urbano Law Office for petitioner.

Petitioner Ruben Serrano, head of the Security Checkers Section of

Failure of an employer to comply with the requirement of prior notice

3. CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS; DOES NOT

5. ID.; ID.; ID.; ID.; NON-COMPLIANCE THEREWITH DOES NOT CONSTITUTE

CD Technologies Asia, Inc. © 2021 cdasiaonline.com

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYMENT;

4. ID.; ID.; ID.; REDUNDANCY; WHEN IS A POSITION CONSIDERED

5. ID.; ID.; LABOR RELATIONS HIRING OF INDEPENDENT SECURITY

9. CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS; REQUIREMENT

11. ID.; ID.; ID.; ESSENCE THEREOF IN ADMINISTRATIVE PROCEEDINGS. —

13. ID.; ID.; ID.; BENEFITS DUE TO EMPLOYEE DISMISSED WITHOUT

PANGANIBAN, J., separate opinion:

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; TERMINATION OF

3. ID.; BILL OF RIGHTS; DUE PROCESS; EMPLOYEE ENTITLED THERETO;

5. ID.; LABOR CODE; TERMINATION OF EMPLOYMENT; NOTICE AND

1. CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS OF LAW;

2. ID.; ID.; DUE PROCESS REQUIREMENT IN LABOR CASES; ASPECTS. —

3. LABOR AND SOCIAL LEGISLATION; LABOR CODE; TERMINATION OF

CD Technologies Asia, Inc. © 2021 cdasiaonline.com

2. LABOR AND SOCIAL LEGISLATION; LABOR CODE; TERMINATION OF

5. ID.; ID.; ID.; AUTHORIZED CAUSES FOR TERMINATION; NOTICE,

6. CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS; PRIVATE DUE

7. ID.; ID.; ID.; PRE-DISMISSAL NOTICE, PART THEREOF. — The pre-

10. ID.; ID.; ID.; LEGAL RELATIONSHIP OF EMPLOYER TO HIS EMPLOYEE,

CD Technologies Asia, Inc. © 2021 cdasiaonline.com

Petitioner was hired by private respondent Isetann Department Store as a

Sometime in 1991, as a cost-cutting measure, private respondent decided

Dear Mr. Serrano,

Please secure your clearance from this office.

[Sgd.] TERESITA A. VILLANUEVA

The loss of his employment prompted petitioner to ﬁle a complaint on

Whether or not complainant is entitled to his monetary claims for

Whether or not Respondent is guilty of unfair labor practice.

Accordingly, the Labor Arbiter ordered: 6

(a) Finding the dismissal of the complainant to be illegal and

(b) Ordering the Respondent to immediately reinstate the

(c) Ordering the Respondent to pay complainant unpaid wages in

(d) Ordering the Respondent to pay complainant the amount of

Private respondent appealed to the NLRC which, in its resolution of March

Hence this petition. Petitioner raises the following issue: cdll

IS THE HIRING OF AN INDEPENDENT SECURITY AGENCY BY THE

Petitioner contends that abolition of private respondent's Security

Petitioner Laid Off for Cause

In De Ocampo v. National Labor Relations Commission , 8 this Court upheld

I n Asian Alcohol Corporation v. National Labor Relations Commission, 10

Accordingly, we hold that the termination of petitioner's services was for

Art. 283 also provides that to terminate the employment of an employee

The decision followed the ruling in several cases involving dismissals

xxx xxx xxx

Need for Reexamining the Wenphil Doctrine

Validity of Petitioner's Layoff Not

Violation of Notice Requirement

CD Technologies Asia, Inc. © 2021 cdasiaonline.com

Justice Panganiban cites Pepsi Cola Bottling Co. v. NLRC, 39 in support of

It is true the Constitution regards labor as "a primary social economic

In sum, we hold that if in proceedings for reinstatement under Art. 283, it

If the employee's separation is without cause, instead of being given

WHEREFORE, the petition is GRANTED and the resolution of the National