G.R. No.

117040 January 27, 2000

RUBEN SERRANO, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and ISETANN DEPARTMENT STORE, respondents.

MENDOZA, J.:

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:

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. Seranno,

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.
1wphi1.nt

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.

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:

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.

In De Ocampo v. National Labor Relations Commission,8 this Court upheld the termination of employment
of three mechanics in a transportation company and their replacement by a company rendering
maintenance and repair services. It held:

In contracting the services of Gemac Machineries, as part of the company's cost-saving program,
the services rendered by the mechanics became redundant and superfluous, and therefore
properly terminable. The company merely exercised its business judgment or management
prerogative. And in the absence of any proof that the management abused its discretion or acted
in a malicious or arbitrary manner, the court will not interfere with the exercise of such
prerogative.9

In Asian Alcohol Corporation v. National Labor Relations Commission,10 the Court likewise upheld the
termination of employment of water pump tenders and their replacement by independent contractors. It
ruled that an employer's good faith in implementing a redundancy program is not necessarily put in doubt
by the availment of the services of an independent contractor to replace the services of the terminated
employees to promote economy and efficiency.

Indeed, as we pointed out in another case, the "[management of a company] cannot be denied the faculty
of promoting efficiency and attaining economy by a study of what units are essential for its operation. To it
belongs the ultimate determination of whether services should be performed by its personnel or
contracted to outside agencies . . . [While there] should be mutual consultation, eventually deference is to
be paid to what management decides."11 Consequently, absent proof that management acted in a
malicious or arbitrary manner, the 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 sufficient
basis for concluding that the termination of petitioner's employment was not a bona fide decision of
management to obtain reasonable return from its investment, which is a right guaranteed to employers
under the Constitution.14 Indeed, that the phase-out of the security section constituted a "legitimate
business decision" is a factual finding of an administrative agency which must be accorded respect and
even finality by this Court since nothing can be found in the record which fairly detracts from such
finding.15

Accordingly, we hold that the termination of petitioner's services was for an authorized cause, i.e.,
redundancy. Hence, pursuant to Art. 283 of the Labor Code, petitioner should be given separation pay at
the rate of one month pay for every year of service.

Sanctions for Violations of the Notice Requirement

Art. 283 also provides that to terminate the employment of an employee for any of the authorized causes
the employer must serve "a written notice on the workers and the Department of Labor and Employment
at least one (1) month before the intended date thereof." In the case at bar, petitioner was given a notice
of termination on October 11, 1991. On the 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 Subuguero 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.

The fines imposed for violations of the notice requirement have varied from P1,000.0022 to P2,000.0023 to
P5,000.0024 to P10,000.00.25

Need for Reexamining the Wenphil Doctrine

Today, we once again consider the question of appropriate sanctions for violations of the notice
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,
suggest 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 cause for such dismissal or layoff. Consequently, in their view, the
employee concerned should be reinstated and paid backwages.

Validity of Petitioner's Layoff Not Affected by Lack of Notice

We agree with our esteemed colleagues, Justices Puno and Panganiban, that we should rethink the
sanction of fine for an employer's disregard of the notice requirement. We do not agree, however, that
disregard of this requirement by an employer renders the dismissal or termination of employment null and
void. Such a stance is actually a reversion to the discredited pre-Wenphil rule of ordering an employee to
be reinstated and paid backwages when it is shown that he has not been given notice and hearing
although his dismissal or layoff is later found to be for a just or authorized cause. Such rule was
abandoned in Wenphil because it is really unjust to require an employer to keep in his service one who is
guilty, for example, of an attempt on the life of the employer or the latter's family, or when the employer is
precisely retrenching in order to prevent losses.

The need is for a rule which, while recognizing the employee's right to notice before he is dismissed or
laid off, at the same time acknowledges the right of the employer to dismiss for any of the just causes
enumerated in Art. 282 or to terminate employment for any of the authorized causes mentioned in Arts.
283-284. If the Wenphil rule imposing a fine on an employer who is found to have dismissed an employee
for cause without prior notice is deemed ineffective in deterring employer violations of the notice
requirement, the remedy is not to declare the dismissal void if there are just or valid grounds for such
dismissal or if the termination is for an authorized cause. That would be to uphold the right of the
employee but deny the right of the employer to dismiss for cause. Rather, the remedy is to order the
payment to the employee of full backwages from the time of his dismissal until the court finds that the
dismissal was for a just cause. But, 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 Vda. de Cuaycong v. Vda. de Sengbengco26 that "acts of Congress, as well as of the
Executive, can deny due process only under the pain of nullity, and judicial proceedings suffering from the
same flaw are subject to the same sanction, any statutory provision to the contrary notwithstanding."
Justice Puno concludes that the dismissal of an employee without notice and hearing, even if for a just
cause, as provided in Art. 282, or for an authorized cause, as provided in Arts. 283-284, is a nullity.
Hence, even if just or authorized cause exist, the employee should be reinstated with full back pay. On
the other hand, Justice Panganiban quotes from the statement in People v. Bocar27 that "[w]here the
denial of the fundamental right of due process is apparent, a decision rendered in disregard of that right is
void for lack of jurisdiction."

Violation of Notice Requirement Not a Denial of Due Process

The cases cited by both 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.

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.

We hold, therefore, that, with respect to Art. 283 of the Labor Code, the employer's failure to comply with
the notice requirement does not constitute a denial of due process but a mere failure to observe a
procedure for the termination of employment which makes the termination of employment merely
ineffectual. It is similar to the failure to observe the provisions of Art. 1592, in relation to Art. 1191, of the
Civil Code34 in rescinding a contract for the sale of immovable property. Under these provisions, while the
power of a party to rescind a contract is implied in reciprocal obligations, nonetheless, in cases involving
the sale of immovable property, the vendor cannot exercise this power even though the vendee defaults
in the payment of the price, except by bringing an action in court or giving notice of rescission by means
of a notarial demand.35 Consequently, a notice of rescission given in the letter of an attorney has no legal
effect, and the vendee can make payment even after the due date since no valid notice of rescission has
been given.36

Indeed, under the Labor Code, only the absence of a just cause for the termination of employment can
make the 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 dismissedfrom 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 resident
Ramon Magsaysay's motto that "he who has less in life should have more in law." That would be a
misapplication of this noble phrase originally from Professor Thomas Reed Powell of the Harvard Law
School.

Justice Panganiban cites Pepsi-Cola Bottling Co. v. NLRC,39 in support of his view that an illegal
dismissal results not only from want of legal cause but also from the failure to observe "due process." The
Pepsi-Cola case actually involved a dismissal for an alleged loss of trust and confidence which, as found
by the Court, was not proven. The dismissal was, therefore, illegal, not because there was a denial of due
process, but because the dismissal was without cause. The statement that the failure of management to
comply with the notice requirement "taints the dismissal with illegality" was merely a dictum thrown in as
additional grounds for holding the dismissal to be illegal.

Given the nature of the violation, therefore, the appropriate sanction for the failure to give notice is the
payment of backwages for the period when the employee is considered not to have been effectively
dismissed or his employment terminated. The sanction is not the payment alone of nominal damages as
Justice Vitug contends.

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 right's 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.

SO ORDERED.

Davide, Jr., C.J., Melo, Kapunan, Quisumbing, Purisima, Pardo, Buena, Gonzaga-Reyes and De Leon,
Jr., JJ.,concur.
Bellosillo J., Please see Separate Opinion.
Puno, J., Please see Dissenting Opinion.
Vitug, J., Please see Separate opinion.
Panganiban J., Please see Separate Opinion.
Ynares-Santiago, J., I join the dissenting opinion of J. Puno.

Separate Opinions
BELLOSILLO, J., separate opinion;

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.

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 certiorariunder 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
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 reconsideration3 Serrano filed the instant
petition imputing grave abuse of discretion on the part of the NLRC.

Art. 282 of the Labor Code enumerates the just causes for the termination of employment by the
employer: (a) serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or the latter's representative in connection with the employee's work; (b) gross and habitual
neglect by the employee of his duties; (c) fraud or willful breach by the employee of the trust reposed in
him by his employer or his duly authorized representative; (d) commission of a crime or offense by the
employee against the person of his employer or any immediate member of his family or his duly
authorized representative; and, (e) other causes analogous to the foregoing.

On the other hand, Arts. 283 and 284 of the same Code enumerate the so-called authorized causes: (a)
installation of labor saving devices; (b) redundancy: (b) 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 other 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 Court6 that the determination of whether to maintain or phase out
an entire department or section or to reduce personnel lies with management. The determination of the
need for the phasing out of a department as a labor and cost saving device because it is no longer
economical to retain its services is a management prerogative.

After having established that the termination of petitioner Ruben Serrano was for an authorized cause, we
now address the issue of whether proper procedures were observed in his dismissal.

Since the State affords protection to labor under the Constitution,7 workers enjoy security of tenure and
may only be removed or terminated upon valid reason and through strict observance of proper
procedure.8 Article 279 of the Labor Code specifically provides

Art. 279. Security of Tenure. In cases of regular employment, the employer shall not terminate
the services of an employee except for a just cause or when authorized by this Title. An
employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his 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, has
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. 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 sough 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 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.13

Procedural due process demands that governmental acts, more specifically so in the case of the judiciary,
not be affected 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. Exevea19 it was held

In administrative proceedings, the essence of due process is simply the opportunity to explain
one's side. One may be heard, not solely by verbal presentation but also, and perhaps even more
creditably as it is more practicable than oral arguments, through pleadings. An actual hearing is
not always an indispensable aspect of due process. As long as a party was given the opportunity
to defend his interests in due course, he cannot be said to have been denied due process of law,
for this opportunity to be heard is the very essence of due process.

From the foregoing, it is clear that the observance of due process is demanded in governmental acts.
Particularly in administrative proceedings, due process starts with the tribunal or hearing officer and not
with the employer. In the instant case, what is mandated of the employer to observe is the 30-day notice
requirement. Hence, non-observance of the notice requirement is not denial of due process but merely a
failure to comply with a legal obligation for which we strongly recommend, we impose a disturbance
compensation as discussed hereunder.

In the instant case, we categorically declare that Serrano was not denied his right to due process.
Instead, his employer did not comply with the 30-day notice requirement. However, while Serrano was not
given the required 30-day notice, he was nevertheless given and, in fact, took advantage of every
opportunity to be heard, first, by the Labor Arbiter, second, by the NLRC, and third, by no less than this
Court. Before the Labor Arbiter and the NLRC, petitioner had the opportunity to present his side not only
orally but likewise through proper pleadings and position papers.

It is not correct therefore to say that petitioner was deprived of his right to due process.

We have consistently upheld in the past as valid although irregular the dismissal of an employee for a just
or authorized cause but without notice and have imposed a sanction on the erring employers in the form
of damages for their failure to comply with the notice requirement. We discussed the rationale behind this
ruling in Wenphil Corporation v. NLRC20 thus

The Court holds that the policy of ordering reinstatement to the service of an employee without
loss of seniority and the payment of his wages during the period of his separation until his actual
reinstatement but not exceeding three years without qualification or deduction, when it appears
he was not afforded due process, although his dismissal was found to be for just and authorized
cause in an appropriate proceeding in the Ministry of Labor and Employment should be re-
examined. It will be highly prejudicial to the interests of the employer to impose on him the
 services of an employee who has been shown to be guilty of the charges that warranted his
dismissal from employment. Indeed, it will demoralize the rank and file if the undeserving, if not
undesirable, remains in the service . . . . 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 (emphasis supplied).

In Sebuguero v. National Labor Relations Commission21 Mr. Justice Davide Jr., now Chief Justice, made
this clear pronouncement

It is now settled that where the dismissal of an employee is in fact for a just and valid cause and
is so proven to be but he is not accorded his right to due process, i.e. he was not furnished the
twin requirements of notice and the opportunity to be heard, the dismissal shall be upheld but the
employer must be sanctioned for 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
Commission22 where he wrote

The rules require the employer to furnish the worker sought to be dismissed with two written
notices before termination of employment can be legally effected: (1) notice which apprises the
employee of the particular acts or omissions for which his dismissal is sought; and (2) the
subsequent notice which informs the employee of the employer's decision to dismiss him. In the
instant case, private respondents have failed to furnish petitioner with the first of the required two
(2) notices and to state plainly the reasons for the dismissal in the termination letter. Failure to
comply with the requirements taints the dismissal with illegality.

Be that as it may, private respondent can dismiss petitioner for just cause . . . . We affirm the
finding of the public respondent that there was just cause to dismiss petitioner, a probationary
employee (emphasis supplied).

Also, in Camua v. National Labor Relations Commission23 this Court through Mr. Justice Mendoza
decreed

In the case at bar, both the Labor Arbiter and the NLRC found that no written notice of the
charges had been given to petitioner by the respondent company. . . . 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 validy 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 (emphasis 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.

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 P10,000.00.00 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 indistress 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 SERRANO back wages and separation
pay the amounts of which to be determined by the Labor Arbiter, plus P10,000.00 as disturbance
compensation which must be paid immediately. Consequently, except as regards the disturbance
compensation, the case should be REMANDED to the Labor Arbiter for the immediate computation and
payment of the back wages and separation pay due petitioner.

EXCEPT as herein stated, I concur with the majority.

PUNO, J., dissenting opinion;

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 relies that the all important right of an employee to
be notified before he is dismissed for a just or authorized cause is not a requirement of due process. This
is a blow on the breadbasket of our lowly employees, a considerable erosion of their constitutional right to
security of tenure, hence this humble dissenting opinion.

A review of our law on dismissal is in order.

I. DISMISSAL DUE TO JUST CAUSE

The law allowing dismissal of an employee due to a just cause is provided in Article 282 of the Labor
Code:
 Art. 282. Termination by employer. An employer may terminate an employment for any of the
following causes:

(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

(e) Other causes analogous to the foregoing.

The long established jurisprudence2 is that to justify dismissal of an employee for a just cause, he must
be given two kinds of notice by his employer, viz: (1) notice to apprise the employee of the particular acts
or omissions for which the dismissal is sought, and (2) subsequent notice to inform him of the employer's
decision to dismiss him. Similarly, deeply ingrained is our ruling that these pre and post notice
requirements are not mere technicalities but are requirements of due process. 3

Then came the case of Wenphil Corporation vs. NLRC and Mallare in 1989.4 It is the majority view that
Wenphil reversed the long standing policy of this Court on dismissal. This is too broad a reading of
Wenphil. A careful statement of the facts of Wenphil and the ruling of this Court is thus proper.

First, the facts. The private respondent Roberto Mallare is the assistant head of the backroom department
of petitioner Wenphil Corporation. At about 2:30 pm on May 20, 1985, Mallare had an altercation with his
co-employee, Job Barrameda, about tending the Salad Bar. He slapped Barrameda's cap, stepped on his
foot, picked up an ice scooper and brandished it against the latter. He refused to be pacified by another
employee who reported the incident to Delilah Hermosura, assistant manager. Hermosura summoned
Mallare but the latter refused to see the former. It took a security guard to bring Mallare to Hermosura.
Instead of making an explanation, Mallare shouted profane words against Hermosura. He declared that
their altercation should only be settled by him and Barrameda.

The following morning, Mallare was suspended. In the afternoon, he was dismissed from the service. He
received an official notice of his dismissal four (4) days later.

Mallare filed with the Labor Arbiter a complaint for illegal suspension, illegal dismissal and unfair labor
practice. No hearing was conducted in view of the repeated absence of the counsel of Mallare. The
parties submitted their respective position papers. On December 3, 1986, the Arbiter denied the
complaint as he found Mallare guilty 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.

On certiorari to this Court, we reversed the NLRC and reinstated the decision of the Arbiter with the
modification that petitioner should pay to Mallare an indemnity of P1,000.00 for dismissing Mallare without
any notice and hearing. We held:

Petitioner insists that private respondent was afforded due process but he refused to avail of his
right to the same; that when the matter was brought to the labor arbiter he was able to submit his
 position paper although the hearing cannot proceed due to the non-appearance of his counsel;
and that the private respondent is guilty of serious misconduct in threatening or coercing a co-
employee which is a ground for dismissal under Article 283 of the Labor Code.

The failure of petitioner to give private respondent the benefit of a hearing before he was
dismissed constitutes an infringement of his constitutional right to due process of law and equal
protection of the laws. The standards of due process in judicial as well as administrative
proceedings have long been established. In its bare minimum due process of law simply means
giving notice and opportunity to be heard before judgment is rendered.

The claim of petitioner that a formal investigation was not necessary because the incident, which
gave rise to the termination of private respondent, was witnessed by his co-employees and
supervisors, is without merit. The basic requirement of due process is that which hears before it
condemns, which proceeds upon inquiry and renders judgment only after trial.

However, it is a matter of fact that when the private respondent filed a complaint against
petitioner, he was afforded the right to an investigation by the labor arbiter. He presented his
position paper as did the petitioner. If no hearing was had, it was the fault of private respondent
as his counsel failed to appear at the scheduled hearings. The labor arbiter concluded that the
dismissal of private respondent was for just cause. He was found guilty of grave misconduct and
insubordination. This is borne by the sworn statements of witnesses. The Court is bound by this
finding of the labor arbiter.

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 member of the Court filed concurring and dissenting opinions. Madam Justice Herrera opined that:
(a) Mallare was dismissed for cause, hence, he is not entitled to reinstatement and backwages; (b) he
was not denied due process; and (c) he has no right to any indemnity but to separation pay to cushion the
impact of his loss of employment Mr. Justice Padilla took the view that: (1) Mallare was not entitled to
reinstatement and backwages as he was guilty of grave misconduct and insubordination; (2) he was
denied administrative due process; and (3) for making such denial, Wenphil should pay "separation pay
(instead of indemnity) in the sum of P1,000.00." Madam Justice Cortes held that: (1) Mallare was not
illegally dismissed; (2) he was not denied due process; (3) he was not entitled to indemnity; and (4) if
P1,000.00 was to be imposed on Wenphil as an administrative sanction, it should form part of the public
fund of the government.

I shall discuss later that Wenphil did not change our ruling that violation of the pre-dismissal notice
requirement is an infringement of due process.

II. DISMISSAL DUE TO AUTHORIZED CAUSE

The applicable law on dismissal due to authorized cause is Article 283 of the Labor Code which provides:

Art. 283. Closure of establishment and reduction of personnel. The employer may also
terminate the employment of any employee due to the installation of labor serving 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 cruse 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.
1wphi1.nt

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 andAlhambra
Industries, Inc. vs. National Labor Relations Commission. More recently, in Worldwide Papermills, Inc. vs.
National Labor Relations Commission, the sum of P5,000.00 was awarded to the employee as
indemnification for the employer's failure to comply with the requirements of procedural due process.

Accordingly, we affirm the deletion by the NLRC of the award of back wages, But because the required
notices of the petitioners' retrenchment were not served upon the petitioners and the DOLE, GTI must be
sanctioned for such failure and thereby required to indemnify each of the petitioners the sum of
P20,000.00 which we find to be just and reasonable under the circumstances of this case.

III. RE-EXAMINATION OF THE WENPHIL DOCTRINE:

FROM BAD TO WORSE

The minority of the Court has asked for a re-examination of Wenphil because as the majority correctly
observed, "the number of cases involving dismissals without the requisite notice to the employee although
effected for just or authorized causes suggests that the imposition of fine for violation of the notice
requirement has not been effective in deterring violations of the notice requirement."
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 employment 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 employer 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 or each case and the gravity of the omission committed by the employer." 7

At the outset, I wish to emphasize that Wenphil itself held, and repeatedly held that "the failure of
petitioner to give private respondent the benefit of a hearing before he was dismissed, constitutes an
infringement of his constitutional right to due process of law and equal protection of the laws. The
standards of due process of law in judicial as well as administrative proceedings have long been
established. In its bare minimum due process of law simply means giving notice and opportunity to be
heard before judgment is rendered."8 The Court then satisfied itself with this bare minimum when it held
that the post dismissal hearing before the Labor Arbiter was enough compliance with 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
employees. To be sure, this is even a supreme understatement. The ugly truth is that Wenphil is the
mother of many unjust and unauthorized dismissals of employees who are too weak to challenge their
powerful employees.

As the Wenphil indemnity doctrine has proved to be highly inimical to the interest of our employees, I
humbly submit a return to the pre-Wenphil rule where a reasonless violation of the pre-dismissal notice
requirement makes the dismissal of an employee illegal and results in his reinstatement. In fine, we
should strike down as illegal the dismissal of an employee 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.

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.

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 (emphasis 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.

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.

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.

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.

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.

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 inCuaycong 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.
SinceGoldberg 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 process. Hence, it could not terminate tenancies
without notice and an opportunity to be heard.

But we need nor 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. 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.

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 R.A. 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:

Art. 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:

Art. 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

Sec. 1. Security of tenure and due process. No worker shall be dismissed except for a just or
authorized cause provided by law and after due process.

Sec. 2. Notice of dismissal. Any employer who seeks to dismiss a worker shall furnish him a
written notice stating the particular acts or omissions constituting the grounds for his dismissal. . .
.

xxx xxx xxx

Sec. 5. Answer and hearing. The worker may answer the allegations stated against him in the
notice of dismissal within a reasonable period from receipt of such notice. The employer shall
afford the worker ample opportunity to be heard and to defend himself with the assistance of his
representative, if he so desires.

These laws, rules and regulations should be related to our decisions interpreting them. Let me therefore
emphasize our rulings holding that the pre-dismissal notice requirement is part of due process.
In Batangas Laguna Tayabas Bus Co. vs. Court of Appeals,25 which was decided under the provisions of
RA No. 1052 as amended by RA No. 1787, this Court ruled that "the failure of the employer to give the
[employee] the benefit of a hearing before he was dismissed constitute an infringement on his
constitutional right to due process of law and not to be denied the equal protection of the laws. . . . 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:

Art. 1700. The relation between capital and labor are not merely contractual. They are so
impressed with public interest that labor contracts must yield to the common good. Therefore,
such contracts are subject to the special laws on labor unions, collective bargaining, strikes and
lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.

Nor do we have to strain on the distinction made by American courts between property and privilege and
follow their ruling that due process will not apply if what is affected is a mere privilege. It is our hoary
ruling that labor is property within the contemplation of the due process clause of the Constitution. Thus,
in Philippine Movie Pictures Workers Association vs. Premiere Productions, Inc.,26 private respondent-
employer filed with the Court of Industrial Relations (CIR) a petition seeking authority to lay off forty-four
of its employees. On the date of the hearing of the petition, at the request of the counsel of the private
respondent, the judge of the CIR conducted an ocular inspection in the premises of the employer. He
interrogated fifteen laborers. On the basis of the ocular inspection, the judge concluded that the petition
for lay off was justified. We did not agree and we ruled that "the right of a person to his labor is deemed to
he 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:

Sec. 2. Standards of due process: requirements of notice. In all cases of termination of

employment, the following standards of due process shall be substantially observed.

I. For termination of employment based on just causes as defined in Article 282 of the Code:

(a) A written notice served on the employee specifying the ground or grounds for
termination, and giving to said employee reasonable opportunity within which to explain
his side;

(b) A hearing or conference during which the employee concerned, with the assistance of
counsel if the employee so desires, is given opportunity to respond to the 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 of the majority is not in consonance with this Rule XXIII.
If we are really zealous of protecting the rights of labor as called for by the Constitution, we should guard
against every violation of their rights regardless of whether the government or a private party is the culprit.
Section 3 of Article XIII of the Constitution requires the State to give full protection to labor. We cannot be
faithful to this duty if we give no protection to labor when the violator of its rights happens to be private
parties like private employers. A private person does not have a better right than the government to
violate an employee's 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.

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.

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 instatement 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.

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.

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 our past and present Congresses, have decided to give more legal
protection and better legal treatment to our employees in their relationship with their employer.
Expressive 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 turn around 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.

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.

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.

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
2821 and the authorized causes under Article 2832 and Article 284.3

An employee whose employment is terminated for a just cause is not entitled to the payment of
separation benefits.4 Separation pay would be due, however, when the lay-off is on account of an
authorized cause. The amount of separation pay would depend on the ground for the termination of
employment. A lay-off due to the installation of a labor saving device, redundancy (Article 283) or disease
(Article 284), entitles the worker to a separation pay equivalent to "one (1) month pay or at least one (1)
month pay for every year of service, whichever is higher." When the termination of employment is due to
retrenchment to prevent losses, or to closure or cessation of operations of an establishment or
undertaking not due to serious business losses or financial reverses, the separation pay is only an
equivalent of "one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever
is higher." In the above instances, a fraction of at least six (6) months is considered as one (1) whole
year.

Due process of law, in its broad concept, is a principle in our legal system that mandates due protection
to the basic rights, inherent or accorded, of every person against harm or transgression without an
intrinsically just and valid law, as well as an opportunity to be heard before an impartial tribunal, that can
warrant such an impairment. Due process guarantees against arbitrariness and bears on both substance
and procedure. Substantive due process concerns itself with the law, its essence, and its concomitant
efficacy; procedural due process focuses on the rules that are established in order to ensure 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, 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. I find it difficult to ascribe either a want of wisdom or a lack of legal
basis to the early pronouncements of this Court that sanction the termination of employment when a just
or an authorized cause to warrant the termination is clearly extant. Regrettably, the Court in some of
those pronouncements has used, less than guarded in my view, the term "due process" when referring to
the notices prescribed in the Labor Code5 and its implementing rules6 that could,
thereby, albeit unintendedly and without meaning to, confuse the latter with the notice requirement in
adjudicatory proceedings. It is not seldom when the law puts up various conditions in the juridical
relations of parties; it would not 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.

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 damage but, to repeat, not to the extent of rendering outrightly illegal
that dismissal or lay-off predicated on valid grounds. I would consider the indemnification to the employee
not a penalty or a fine against the employer, the levy of either of which would require an appropriate
legislative enactment; rather, I take the grant of indemnity as justifiable as an award of nominal damages
in accordance with the provisions of Articles 2221-2223 of the Civil Code, viz:
 Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been
violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him.

Art. 2222. The court may award nominal damages in every obligation arising from any source
enumerated in article 1157, or in every case where any property right has been invaded.

Art. 2223. The adjudication of nominal damages shall preclude further contest upon the right
involved and all accessory questions, as between the parties to the suit, or their respective heirs
and assigns.

There is no fixed formula for determining the precise amount of nominal damages. In fixing the amount of
nominal damages to be awarded, the circumstances of each case should thus be taken into account,
such as, to exemplify, the

(a) length of service or employment of the dismissed employee;

(b) his salary or compensation at the time termination of employment vis-a-vis the capability of
the employer to pay;

(c) question of whether the employer has deliberately violated the requirements for termination of
employment or has attempted to comply, at least substantially, therewith; and/or

(d) reasons for the termination of employment.

I might stress the rule that the award of nominal damages is not for the purpose of indemnification for a
loss but for the recognition and vindication of a right. The degree of recovery therefor can depend, on the
one hand, on the constitution of the right, and, upon the other hand, on the extent and manner by which
that right is ignored to the prejudice of the holder of that right.

In fine7

A. A just cause or an authorized cause and a written notice of dismissal or lay-off, as the case
may be, are required concurrently but not really equipollent in their consequence, in terminating
an employer-employee relationship.

B. Where there is neither just cause nor authorized cause, the reinstatement of the employee and
the payment of back salaries would be proper and should be decreed. If the dismissal or lay-off is
attended by bad faith or if the employer acted in wanton or oppressive manner, moral and
exemplary damages might also be a warded. In this respect, the Civil Code provides:

Art. 2220. Willful injury to property may be a legal ground for awarding moral damages if
the court should find that, under the circumstances, such damages are just due. The
same rule applies to breaches of contract where the defendant acted fraudulently or in
bad faith.

Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages if
the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner
(Civil Code).

Separation pay can substitute for reinstatement if such reinstatement is not feasible, such as in
case of a clearly strained employer-employee relationship (limited to managerial positions and
 contracts of employment predicated on trust and confidence) or when the work or position
formerly held by the dismissed employee plainly has since ceased to be available.

C. Where there is just cause or an authorized cause for the dismissal or lay-off but the required
written notices therefor have not been properly observed by an employer, it would neither be light
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.

PANGANIBAN, J., separate opinion;

In the case before us, the Court is unanimous in at least two findings: (1) petitioner's dismissal was due to
an authorized cause, redundancy; and (2) petitioner was notified of his dismissal only on the very day his
employment was terminated. The contentious issue arising out of these two findings is as follows: What is
the legal effect and the corresponding sanction for the failure of the employer to give the employee and
the Department of Labor and Employment (DOLE) the 30-day notice of termination required under Article
283 of the Labor Code?

During the last ten (10) years, the Court has answered the foregoing question by ruling that the dismissal
should be upheld although the employee should be given "indemnity or damages" ranging from P1,000 to
P10,000 depending on the circumstances.

The present ponencia of Mr. Justice Mendoza holds that "the termination of his employment should be
considered ineffectual and the [employee] should be paid back wages" from the time of his dismissal until
the Court finds that the dismissal was for a just cause.

Reexamination of the "Indemnity Only" Rule

I am grateful that the Court has decided to reexamine our ten-year doctrine on this question and has at
least, in the process, increased the monetary award that should go to the dismissed employee from a
nominal sum in the concept "indemnity or damages" to "full back wages." Shortly after my assumption of
office on October 10, 1995, I already questioned this practice of granting "indemnity only" to employees
who were dismissed for cause but without due process.1 I formally registered reservations on this rule in
my ponencia in MGG Marine Services v. NLRC2 and gave it full discussion in my Dissents in Better
Buildings v. NLRC3 and in Del Val v. NLRC.4

Without in any way diminishing my appreciation of this reexamination and of the more financially-
generous treatment the Court has accorded labor, I write to take issue with the legal basis of my
esteemed colleague, Mr. Justice Mendoza, in arriving at his legal conclusion that "the employer's failure
to comply with the notice requirement does not constitute a denial of due process but a mere failure to
observe a procedure for the termination of employment which makes the termination of employment
merely ineffectual." In short, he believes that (1) the 30-day notice requirement finds basis only in the
Labor Code, and (2) the sanction for its violation is only "full back wages."

With due respect, I submit the following counter-arguments:

(1) The notice requirement finds basis not only in the Labor Code but, more important, in the due
process clause of the Constitution.

(2) Consequently, when the employee is dismissed without due process, the legal effect is an
illegal dismissal and the appropriate sanction is full back wages plus reinstatement, not merely
full back wages. It is jurisprudentially settled, as I will show presently, that when procedural due
process is violated, the proceedings in this case, the dismissal will be voided, and the
parties will have to be returned to theirstatus 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.

Without Due Process, the Proceedings Are Illegal

In the past, this Court has untiringly reiterated that there are two essential requisites for an employer's
valid termination of an employee's services: (1) a just5 or authorized6 cause 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 basis 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 disregarded of the 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).

In the earlier case Bacus v. Ople,13 this Court also nullified the then labor minister's clearance to terminate
the employment of company workers who had supposedly staged an illegal strike. The reason for this
ruling was the denial of sufficient opportunity for them to present their evidence and prove their case. The
Court explained:14

A mere finding of the illegality of a strike should not be automatically followed by a wholesale
dismissal of the strikers from their employment. What is more, the finding of the illegality of the
strike by respondent Minister of Labor and Employment is predicated on the evidence
ascertained through an irregular procedure conducted under the semblance of summary methods
and speedy disposition of labor disputes involving striking employees.

While it is true that administrative agencies exercising 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."

In Philippine National Bank v. Apalisok,15 Primitivo Virtudazo, an employee of PNB, was served a
Memorandum stating the finding against him of a prima facie case for dishonesty and violation of bank
rules and regulations. He submitted his Answer denying the charges and explaining his defenses.

Later, two personnel examiners of the bank conducted a fact-finding investigation. They stressed to him
that a formal investigation would follow, in which he could confront and examine the witnesses for the
bank, as well as present his own. What followed, however, was a Memorandum notifying him that he had
been found guilty of the charges and that he was being dismissed. After several futile attempts to secure
a copy of the Decision rendered against him, he instituted against PNB a Complaint for illegal dismissal
and prayed for reinstatement and damages.

The trial court held that Virtudazo had been deprived of his rights to be formally investigated and to cross-
examine the witnesses. This Court sustained the trial court, stating resolutely: "The proceedings having
been conducted without according to Virtudazo the "cardinal primary rights of due process" guaranteed to
every party in an administrative or 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. Dactrdao,20 People v. Calo Jr.21 and People
v. Burgos,22this 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.

In 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 Decision24 in People v. Parazo25 upon realizing that the accused
"a deaf-mute, a mental retardate, whose mental age [was] only seven (7) years and nine (9) months, and
with low IQ of 60 only" had not been ably assisted by a sign language expert during his arraignment
and trial. CitingPeople 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 re-arraignment
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.

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 prudence 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 with Wenphil v. NLRC,30 the Court has held: where
there is just cause for the dismissal of an employee but the employer fails to follow the requirements of
procedural due process, the former is not entitled to back wages, reinstatement (or separation pay in
case reinstatement is no longer feasible) or other benefits. Instead, the employee is granted an indemnity
(or penalty or damages) ranging from P1,00031 to as much as P10,000,32 depending on the circumstances
of the case and the gravity of the employer's omission. Since then, Wenphil has perfunctorily been
applied in most subsequent cases33 involving a violation of due process (although just cause has been
duly proven), without regard for the peculiar factual milieu of each case. Indemnity or damages has
become an easy substitute for due process.

Be it remembered, however, that the facts in Wenphil clearly showed the impracticality and the futility of
observing the procedure laid down by law and by the Constitution for terminating employment. The
employee involved therein appeared to have exhibited a violent temper and caused trouble during office
hours. In an altercation with a co-employee, he "slapped [the latter's] cap, stepped on his foot and picked
up the ice scooper and brandished it against [him]." When summoned by the assistant manager, the
employee "shouted and uttered profane words" instead of giving an explanation. He was caught virtually
in flagrante delicto in the presence of many people. Under the circumstances action was necessary to
preserve order and discipline, as well as to safeguard the customers' confidence in the employer's
business a fastfood chain catering to the general public where courtesy is a prized virtue.

However, in most of the succeeding cases, including the present one before us in which the petitioner
was dismissed on the very day he was served notice, there were ample opportunities for the employers to
observe the requisites of due process. There were no exigencies that called for immediate response. And
yet, Wenphil was instantly invoked and due process brushed aside.

I believe that the price that the Court has set for the infringement of the fundamental right to due process
is too insignificant, too niggardly, and sometimes even too late. I believe that imposing a stiffer sanction is
the only way to emphasize to employers the extreme importance of the right to due process in our
democratic system. Such right is too sacred to be taken for granted or glossed over in a cavalier fashion.
To hold otherwise, as by simply imposing an indemnity or even "full back wages," is to allow the rich and
powerful to virtually purchase and to thereby stifle a constitutional right granted to the poor and
marginalized.

It may be asked: If the employee is guilty anyway, what difference would it make if he is fired without due
process? By the same token, it may be asked: If in the end, after due hearing, a criminal offender is found
guilty anyway, what difference would it make if he is simply penalized immediately without the trouble and
the expense of trial? The absurdity of this argument is too apparent to deserve further discourse.34

Worker's Right to Notice Is Constitutional, Not Merely Statutory

According to the ponencia of Mr. Justice Mendoza, the "violation of the notice requirement cannot be
considered a denial of due process resulting in the nullity of the employee's dismissal or lay-off." He
argues that the due process clause of the Constitution may be used against the government only. Since
the Labor Code does not accord employees the right to a hearing, ergo, he concludes, they do not have
the right to due process.

I disagree. True, as pointed out by Mr. Justice Mendoza, traditional doctrine holds that constitutional
rights may be invoked only against the State. This is because in the past, only the State was in a position
to violate these rights, including the due process clause. However, with the advent of liberalization,
deregulation and privatization, the State tended to cede some of its powers to the "market forces." Hence,
corporate behemoths and even individuals may now be sources of abuses and threats to human rights
and liberties. I believe, therefore, that such traditional doctrine should be modified to enable the judiciary
to cope with these new paradigms and to continue protecting the people from new forms of abuses.34-a

Indeed the employee is entitled to due process not because of the Labor code, but because of the
Constitution. Elementary is the doctrine that constitutional provisions are deemed written into every
statute, contract or undertaking. Worth noting is that "[o]ne's employment, profession, trade or calling is a
property right within the protection of the constitutional guaranty of due process of law."35

In a long line of cases involving judicial, quasi-judicial and administrative proceedings, some of which I
summarized earlier, the Court has held that the twin requirements of notice and hearing (or, at the very
least, an opportunity to be heard) constitute the essential elements of due process. In labor proceedings,
both are theconditio 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.

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
forces 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.

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.

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.

G.R. No. 158693 November 17, 2004

JENNY M. AGABON and VIRGILIO C. AGABON, petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC), RIVIERA HOME IMPROVEMENTS, INC.
and VICENTE ANGELES, respondents.

DECISION

YNARES-SANTIAGO, J.:

This petition for review seeks to reverse the decision1 of the Court of Appeals dated January 23,
2003, in CA-G.R. SP No. 63017, modifying the decision of National Labor Relations Commission
(NLRC) in NLRC-NCR Case No. 023442-00.
Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and
installing ornamental and construction materials. It employed petitioners Virgilio Agabon and Jenny
Agabon as gypsum board and cornice installers on January 2, 19922 until February 23, 1999 when
they were dismissed for abandonment of work.

Petitioners then filed a complaint for illegal dismissal and payment of money claims3 and on
December 28, 1999, the Labor Arbiter rendered a decision declaring the dismissals illegal and
ordered private respondent to pay the monetary claims. The dispositive portion of the decision
states:

WHEREFORE, premises considered, We find the termination of the complainants illegal.

Accordingly, respondent is hereby ordered to pay them their backwages up to November 29,
1999 in the sum of:

1. Jenny M. Agabon - P56, 231.93

2. Virgilio C. Agabon - 56, 231.93

and, in lieu of reinstatement to pay them their separation pay of one (1) month for every year
of service from date of hiring up to November 29, 1999.

Respondent is further ordered to pay the complainants their holiday pay and service
incentive leave pay for the years 1996, 1997 and 1998 as well as their premium pay for
holidays and rest days and Virgilio Agabon's 13th month pay differential amounting to TWO
THOUSAND ONE HUNDRED FIFTY (P2,150.00) Pesos, or the aggregate amount of ONE
HUNDRED TWENTY ONE THOUSAND SIX HUNDRED SEVENTY EIGHT & 93/100
(P121,678.93) Pesos for Jenny Agabon, and ONE HUNDRED TWENTY THREE
THOUSAND EIGHT HUNDRED TWENTY EIGHT & 93/100 (P123,828.93) Pesos for Virgilio
Agabon, as per attached computation of Julieta C. Nicolas, OIC, Research and Computation
Unit, NCR.

SO ORDERED.4

On appeal, the NLRC reversed the Labor Arbiter because it found that the petitioners had
abandoned their work, and were not entitled to backwages and separation pay. The other money
claims awarded by the Labor Arbiter were also denied for lack of evidence.5

Upon denial of their motion for reconsideration, petitioners filed a petition for certiorari with the Court
of Appeals.

The Court of Appeals in turn ruled that the dismissal of the petitioners was not illegal because they
had abandoned their employment but ordered the payment of money claims. The dispositive portion
of the decision reads:

WHEREFORE, the decision of the National Labor Relations Commission is REVERSED only
insofar as it dismissed petitioner's money claims. Private respondents are ordered to pay
petitioners holiday pay for four (4) regular holidays in 1996, 1997, and 1998, as well as their
service incentive leave pay for said years, and to pay the balance of petitioner Virgilio
Agabon's 13th month pay for 1998 in the amount of P2,150.00.

SO ORDERED.6
Hence, this petition for review on the sole issue of whether petitioners were illegally dismissed.7

Petitioners assert that they were dismissed because the private respondent refused to give them
assignments unless they agreed to work on a "pakyaw" basis when they reported for duty on
February 23, 1999. They did not agree on this arrangement because it would mean losing benefits
as Social Security System (SSS) members. Petitioners also claim that private respondent did not
comply with the twin requirements of notice and hearing.8

Private respondent, on the other hand, maintained that petitioners were not dismissed but had
abandoned their work.9 In fact, private respondent sent two letters to the last known addresses of the
petitioners advising them to report for work. Private respondent's manager even talked to petitioner
Virgilio Agabon by telephone sometime in June 1999 to tell him about the new assignment at Pacific
Plaza Towers involving 40,000 square meters of cornice installation work. However, petitioners did
not report for work because they had subcontracted to perform installation work for another
company. Petitioners also demanded for an increase in their wage to P280.00 per day. When this
was not granted, petitioners stopped reporting for work and filed the illegal dismissal case.10

It is well-settled that findings of fact of quasi-judicial agencies like the NLRC are accorded not only
respect but even finality if the findings are supported by substantial evidence. This is especially so
when such findings were affirmed by the Court of Appeals.11 However, if the factual findings of the
NLRC and the Labor Arbiter are conflicting, as in this case, the reviewing court may delve into the
records and examine for itself the questioned findings.12

Accordingly, the Court of Appeals, after a careful review of the facts, ruled that petitioners' dismissal
was for a just cause. They had abandoned their employment and were already working for another
employer.

To dismiss an employee, the law requires not only the existence of a just and valid cause but also
enjoins the employer to give the employee the opportunity to be heard and to defend
himself.13 Article 282 of the Labor Code enumerates the just causes for termination by the employer:
(a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer
or the latter's representative in connection with the employee's work; (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.

Abandonment is the deliberate and unjustified refusal of an employee to resume his employment.14 It
is a form of neglect of duty, hence, a just cause for termination of employment by the employer.15 For
a valid finding of abandonment, these two factors should be present: (1) the failure to report for work
or absence without valid or justifiable reason; and (2) a clear intention to sever employer-employee
relationship, with the second as the more determinative factor which is manifested by overt acts from
which it may be deduced that the employees has no more intention to work. The intent to
discontinue the employment must be shown by clear proof that it was deliberate and unjustified.16

In February 1999, petitioners were frequently absent having subcontracted for an installation work
for another company. Subcontracting for another company clearly showed the intention to sever the
employer-employee relationship with private respondent. This was not the first time they did this. In
January 1996, they did not report for work because they were working for another company. Private
respondent at that time warned petitioners that they would be dismissed if this happened again.
Petitioners disregarded the warning and exhibited a clear intention to sever their employer-employee
relationship. The record of an employee is a relevant consideration in determining the penalty that
should be meted out to him.17

In Sandoval Shipyard v. Clave,18 we held that an employee who deliberately absented from work
without leave or permission from his employer, for the purpose of looking for a job elsewhere, is
considered to have abandoned his job. We should apply that rule with more reason here where
petitioners were absent because they were already working in another company.

The law imposes many obligations on the employer such as providing just compensation to workers,
observance of the procedural requirements of notice and hearing in the termination of employment.
On the other hand, the law also recognizes the right of the employer to expect from its workers not
only good performance, adequate work and diligence, but also good conduct19 and loyalty. The
employer may not be compelled to continue to employ such persons whose continuance in the
service will patently be inimical to his interests.20

After establishing that the terminations were for a just and valid cause, we now determine if the
procedures for dismissal were observed.

The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of the Omnibus
Rules Implementing the Labor Code:

Standards of due process: requirements of notice. In all cases of termination of

employment, the following standards of due process shall be substantially observed:

I. For termination of employment based on just causes as defined in Article 282 of the Code:

(a) A written notice served on the employee specifying the ground or grounds for termination,
and giving to said employee reasonable opportunity within which to explain his side;

(b) A hearing or conference during which the employee concerned, with the assistance of
counsel if the employee so desires, is given opportunity to respond to the 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 case of termination, the foregoing notices shall be served on the employee's last known
address.

Dismissals based on just causes contemplate acts or omissions attributable to the employee while
dismissals based on authorized causes involve grounds under the Labor Code which allow the
employer to terminate employees. A termination for an authorized cause requires payment of
separation pay. When the termination of employment is declared illegal, reinstatement and full
backwages are mandated under Article 279. If reinstatement is no longer possible where the
dismissal was unjust, separation pay may be granted.

Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give
the employee two written notices and a hearing or opportunity to be heard if requested by the
employee before terminating the employment: a notice specifying the grounds for which dismissal is
sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice
of the decision to dismiss; and (2) if the dismissal is based on authorized causes under Articles 283
and 284, the employer must give the employee and the Department of Labor and Employment
written notices 30 days prior to the effectivity of his separation.

From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause
under Article 282 of the Labor Code, for an authorized cause under Article 283, or for health reasons
under Article 284, and due process was observed; (2) the dismissal is without just or authorized
cause but due process was observed; (3) the dismissal is without just or authorized cause and there
was no due process; and (4) the dismissal is for just or authorized cause but due process was not
observed.

In the first situation, the dismissal is undoubtedly valid and the employer will not suffer any liability.

In the second and third situations where the dismissals are illegal, Article 279 mandates that the
employee is entitled to reinstatement without loss of seniority rights and other privileges and full
backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from
the time the compensation was not paid up to the time of actual reinstatement.

In the fourth situation, the dismissal should be upheld. While the procedural infirmity cannot be
cured, it should not invalidate the dismissal. However, the employer should be held liable for non-
compliance with the procedural requirements of due process.

The present case squarely falls under the fourth situation. The dismissal should be upheld because
it was established that the petitioners abandoned their jobs to work for another company. Private
respondent, however, did not follow the notice requirements and instead argued that sending notices
to the last known addresses would have been useless because they did not reside there anymore.
Unfortunately for the private respondent, this is not a valid excuse because the law mandates the
twin notice requirements to the employee's last known address.21 Thus, it should be held liable for
non-compliance with the procedural requirements of due process.

A review and re-examination of the relevant legal principles is appropriate and timely to clarify the
various rulings on employment termination in the light of Serrano v. National Labor Relations
Commission.22

Prior to 1989, the rule was that a dismissal or termination is illegal if the employee was not given any
notice. In the 1989 case of Wenphil Corp. v. National Labor Relations Commission,23 we reversed
this long-standing rule and held that the dismissed employee, although not given any notice and
hearing, was not entitled to reinstatement and backwages because the dismissal was for grave
misconduct and insubordination, a just ground for termination under Article 282. The employee had
a violent temper and caused trouble during office hours, defying superiors who tried to pacify him.
We concluded that reinstating the employee and awarding backwages "may encourage him to do
even worse and will render a mockery of the rules of discipline that employees are required to
observe."24 We further held that:

Under the circumstances, the dismissal of the private respondent for just cause should be
maintained. He has no right to return to his former employment.

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.25

The rule thus evolved: where the employer had a valid reason to dismiss an employee but did not
follow the due process requirement, the dismissal may be upheld but the employer will be penalized
to pay an indemnity to the employee. This became known as the Wenphil or Belated Due Process
Rule.

On January 27, 2000, in Serrano, the rule on the extent of the sanction was changed. We held that
the violation by the employer of the notice requirement in termination for just or authorized causes
was not a denial of due process that will nullify the termination. However, the dismissal is ineffectual
and the employer must pay full backwages from the time of termination until it is judicially declared
that the dismissal was for a just or authorized cause.

The rationale for the re-examination of the Wenphil doctrine in Serrano was the significant number of
cases involving dismissals without requisite notices. We concluded that the imposition of penalty by
way of damages for violation of the notice requirement was not serving as a deterrent. Hence, we
now required payment of full backwages from the time of dismissal until the time the Court finds the
dismissal was for a just or authorized cause.

Serrano was confronting the practice of employers to "dismiss now and pay later" by imposing full
backwages.

We believe, however, that the ruling in Serrano did not consider the full meaning of Article 279 of the
Labor Code which states:

ART. 279. Security of Tenure. In cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause or when authorized by this
Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his 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 means that the termination is illegal only if it is not for any of the justified or authorized causes
provided by law. Payment of backwages and other benefits, including reinstatement, is justified only
if the employee was unjustly dismissed.

The fact that the Serrano ruling can cause unfairness and injustice which elicited strong dissent has
prompted us to revisit the doctrine.

To be sure, the Due Process Clause in Article III, Section 1 of the Constitution embodies a system of
rights based on moral principles so deeply imbedded in the traditions and feelings of our people as
to be deemed fundamental to a civilized society as conceived by our entire history. Due process is
that which comports with the deepest notions of what is fair and right and just.26 It is a constitutional
restraint on the legislative as well as on the executive and judicial powers of the government
provided by the Bill of Rights.

Due process under the Labor Code, like Constitutional due process, has two aspects:
substantive, i.e., the valid and authorized causes of employment termination under the Labor Code;
and procedural, i.e., the manner of dismissal. Procedural due process requirements for dismissal are
found in the Implementing Rules of P.D. 442, as amended, otherwise known as the Labor Code of
the Philippines in Book VI, Rule I, Sec. 2, as amended by Department Order Nos. 9 and
10.27 Breaches of these due process requirements violate the Labor Code. Therefore statutory due
process should be differentiated from failure to comply with constitutional due process.

Constitutional due process protects the individual from the government and assures him of his rights
in criminal, civil or administrative proceedings; while statutory due process found in the Labor Code
and Implementing Rules protects employees from being unjustly terminated without just cause after
notice and hearing.

In Sebuguero v. National Labor Relations Commission,28 the dismissal was for a just and valid cause
but the employee was not accorded due process. The dismissal was upheld by the Court but the
employer was sanctioned. The sanction should be in the nature of indemnification or penalty, and
depends on the facts of each case and the gravity of the omission committed by the employer.

In Nath v. National Labor Relations Commission,29 it was ruled that even if the employee was not
given due process, the failure did not operate to eradicate the just causes for dismissal. The
dismissal being for just cause,albeit without due process, did not entitle the employee to
reinstatement, backwages, damages and attorney's fees.

Mr. Justice Jose C. Vitug, in his separate opinion in MGG Marine Services, Inc. v. National Labor
Relations Commission,30 which opinion he reiterated in Serrano, stated:

C. Where there is just cause for dismissal but due process has not been properly observed
by an employer, it would not be right to order either the reinstatement of the dismissed
employee or the payment of backwages to him. In failing, however, to comply with the
procedure prescribed by law in terminating the services of the employee, the employer must
be deemed to have opted or, in any case, should be made liable, for the payment of
separation pay. It might be pointed out that the notice to be given and the hearing to be
conducted generally constitute the two-part due process requirement of law to be accorded
to the employee by the employer. Nevertheless, peculiar circumstances might obtain in
certain situations where to undertake the above steps would be no more than a useless
formality and where, accordingly, it would not be imprudent to apply the res ipsa loquitur rule
and award, in lieu of separation pay, nominal damages to the employee. x x x.31

After carefully analyzing the consequences of the divergent doctrines in the law on employment
termination, we believe that in cases involving dismissals for cause but without observance of the
twin requirements of notice and hearing, the better rule is to abandon the Serrano doctrine and to
follow Wenphil by holding that the dismissal was for just cause but imposing sanctions on the
employer. Such sanctions, however, must be stiffer than that imposed in Wenphil. By doing so, this
Court would be able to achieve a fair result by dispensing justice not just to employees, but to
employers as well.

The unfairness of declaring illegal or ineffectual dismissals for valid or authorized causes but not
complying with statutory due process may have far-reaching consequences.

This would encourage frivolous suits, where even the most notorious violators of company policy are
rewarded by invoking due process. This also creates absurd situations where there is a just or
authorized cause for dismissal but a procedural infirmity invalidates the termination. Let us take for
example a case where the employee is caught stealing or threatens the lives of his co-employees or
has become a criminal, who has fled and cannot be found, or where serious business losses
demand that operations be ceased in less than a month. Invalidating the dismissal would not serve
public interest. It could also discourage investments that can generate employment in the local
economy.

The constitutional policy to provide full protection to labor is not meant to be a sword to oppress
employers. The commitment of this Court to the cause of labor does not prevent us from sustaining
the employer when it is in the right, as in this case.32 Certainly, an employer should not be compelled
to pay employees for work not actually performed and in fact abandoned.

The employer should not be compelled to continue employing a person who is admittedly guilty of
misfeasance or malfeasance and whose continued employment is patently inimical to the employer.
The law protecting the rights of the laborer authorizes neither oppression nor self-destruction of the
employer.33

It must be stressed that in the present case, the petitioners committed a grave offense, i.e.,
abandonment, which, if the requirements of due process were complied with, would undoubtedly
result in a valid dismissal.

An employee who is clearly guilty of conduct violative of Article 282 should not be protected by the
Social Justice Clause of the Constitution. Social justice, as the term suggests, should be used only
to correct an injustice. As the eminent Justice Jose P. Laurel observed, social justice must be
founded on the recognition of the necessity of interdependence among diverse units of a society and
of the protection that should be equally and evenly extended to all groups as a combined force in our
social and economic life, consistent with the fundamental and paramount objective of the state of
promoting the health, comfort, and quiet of all persons, and of bringing about "the greatest good to
the greatest number."34

This is not to say that the Court was wrong when it ruled the way it did in Wenphil, Serrano and
related cases. Social justice is not based on rigid formulas set in stone. It has to allow for changing
times and circumstances.

Justice Isagani Cruz strongly asserts the need to apply a balanced approach to labor-management
relations and dispense justice with an even hand in every case:

We have repeatedly stressed that social justice or any justice for that matter is for the
deserving, whether he be a millionaire in his mansion or a pauper in his hovel. It is true that,
in case of reasonable doubt, we are to tilt the balance in favor of the poor to whom the
Constitution fittingly extends its sympathy and compassion. But never is it justified to give
preference to the poor simply because they are poor, or reject the rich simply because they
are rich, for justice must always be served for the poor and the rich alike, according to the
mandate of the law.35

Justice in every case should only be for the deserving party. It should not be presumed that every
case of illegal dismissal would automatically be decided in favor of labor, as management has rights
that should be fully respected and enforced by this Court. As interdependent and indispensable
partners in nation-building, labor and management need each other to foster productivity and
economic growth; hence, the need to weigh and balance the rights and welfare of both the employee
and employer.

Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process
should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should
indemnify the employee for the violation of his statutory rights, as ruled in Reta v. National Labor
Relations Commission.36 The indemnity to be imposed should be stiffer to discourage the abhorrent
practice of "dismiss now, pay later," which we sought to deter in the Serrano ruling. The sanction
should be in the nature of indemnification or penalty and should depend on the facts of each case,
taking into special consideration the gravity of the due process violation of the employer.

Under the Civil Code, nominal damages is 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.37

As enunciated by this Court in Viernes v. National Labor Relations Commissions,38 an employer is

liable to pay indemnity in the form of nominal damages to an employee who has been dismissed if,
in effecting such dismissal, the employer fails to comply with the requirements of due process. The
Court, after considering the circumstances therein, fixed the indemnity at P2,590.50, which was
equivalent to the employee's one month salary. This indemnity is intended not to penalize the
employer but to vindicate or recognize the employee's right to statutory due process which was
violated by the employer.39

The violation of the petitioners' right to statutory due process by the private respondent warrants the
payment of indemnity in the form of nominal damages. The amount of such damages is addressed
to the sound discretion of the court, taking into account the relevant circumstances.40 Considering
the prevailing circumstances in the case at bar, we deem it proper to fix it at P30,000.00. We believe
this form of damages would serve to deter employers from future violations of the statutory due
process rights of employees. At the very least, it provides a vindication or recognition of this
fundamental right granted to the latter under the Labor Code and its Implementing Rules.

Private respondent claims that the Court of Appeals erred in holding that it failed to pay petitioners'
holiday pay, service incentive leave pay and 13th month pay.

We are not persuaded.

We affirm the ruling of the appellate court on petitioners' money claims. Private respondent is liable
for petitioners' holiday pay, service incentive leave pay and 13th month pay without deductions.

As a general rule, one who pleads payment has the burden of proving it. Even where the employee
must allege non-payment, the general rule is that the burden rests on the employer to prove
payment, rather than on the employee to prove non-payment. The reason for the rule is that the
pertinent personnel files, payrolls, records, remittances and other similar documents which will
show that overtime, differentials, service incentive leave and other claims of workers have been paid
are not in the possession of the worker but in the custody and absolute control of the employer.41

In the case at bar, if private respondent indeed paid petitioners' holiday pay and service incentive
leave pay, it could have easily presented documentary proofs of such monetary benefits to disprove
the claims of the petitioners. But it did not, except with respect to the 13th month pay wherein it
presented cash vouchers showing payments of the benefit in the years disputed.42 Allegations by
private respondent that it does not operate during holidays and that it allows its employees 10 days
leave with pay, other than being self-serving, do not constitute proof of payment. Consequently, it
failed to discharge the onus probandi thereby making it liable for such claims to the petitioners.

Anent the deduction of SSS loan and the value of the shoes from petitioner Virgilio Agabon's 13th
month pay, we find the same to be unauthorized. The evident intention of Presidential Decree No.
851 is to grant an additional income in the form of the 13th month pay to employees not already
receiving the same43 so as "to further protect the level of real wages from the ravages of world-wide
inflation."44 Clearly, as additional income, the 13th month pay is included in the definition of wage
under Article 97(f) of the Labor Code, to wit:

(f) "Wage" paid to any employee shall mean the remuneration or earnings, however
designated, capable of being expressed in terms of money whether fixed or ascertained on a
time, task, piece , or commission basis, or other method of calculating the same, which is
payable by an employer to an employee under a written or unwritten contract of employment
for work done or to be done, or for services rendered or to be rendered and includes the fair
and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other
facilities customarily furnished by the employer to the employee"

from which an employer is prohibited under Article 11345 of the same Code from making any
deductions without the employee's knowledge and consent. In the instant case, private respondent
failed to show that the deduction of the SSS loan and the value of the shoes from petitioner Virgilio
Agabon's 13th month pay was authorized by the latter. The lack of authority to deduct is further
bolstered by the fact that petitioner Virgilio Agabon included the same as one of his money claims
against private respondent.

The Court of Appeals properly reinstated the monetary claims awarded by the Labor Arbiter ordering
the private respondent to pay each of the petitioners holiday pay for four regular holidays from 1996
to 1998, in the amount of P6,520.00, service incentive leave pay for the same period in the amount
of P3,255.00 and the balance of Virgilio Agabon's thirteenth month pay for 1998 in the amount of
P2,150.00.

WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of the Court of
Appeals dated January 23, 2003, in CA-G.R. SP No. 63017, finding that petitioners' Jenny and
Virgilio Agabon abandoned their work, and ordering private respondent to pay each of the petitioners
holiday pay for four regular holidays from 1996 to 1998, in the amount of P6,520.00, service
incentive leave pay for the same period in the amount of P3,255.00 and the balance of Virgilio
Agabon's thirteenth month pay for 1998 in the amount of P2,150.00 isAFFIRMED with
the MODIFICATION that private respondent Riviera Home Improvements, Inc. is
furtherORDERED to pay each of the petitioners the amount of P30,000.00 as nominal damages for
non-compliance with statutory due process.

No costs.

SO ORDERED.

G.R. No. 162994 September 17, 2004

DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A. TECSON, petitioners,

vs.
GLAXO WELLCOME PHILIPPINES, INC., Respondent.

RESOLUTION

TINGA, J.:

Confronting the Court in this petition is a novel question, with constitutional overtones, involving the validity of the policy of a
pharmaceutical company prohibiting its employees from marrying employees of any competitor company.
This is a Petition for Review on Certiorari assailing the Decision1 dated May 19, 2003 and the Resolution dated March 26,
2004 of the Court of Appeals in CA-G.R. SP No. 62434.2

Petitioner Pedro A. Tecson (Tecson) was hired by respondent Glaxo Wellcome Philippines, Inc. (Glaxo) as medical
representative on October 24, 1995, after Tecson had undergone training and orientation.

Thereafter, Tecson signed a contract of employment which stipulates, among others, that he agrees to study and abide by
existing company rules; to disclose to management any existing or future relationship by consanguinity or affinity with co-
employees or employees of competing drug companies and should management find that such relationship poses a
possible conflict of interest, to resign from the company.

The Employee Code of Conduct of Glaxo similarly provides that an employee is expected to inform management of any
existing or future relationship by consanguinity or affinity with co-employees or employees of competing drug companies. If
management perceives a conflict of interest or a potential conflict between such relationship and the employees
employment with the company, the management and the employee will explore the possibility of a "transfer to another
department in a non-counterchecking position" or preparation for employment outside the company after six months.

Tecson was initially assigned to market Glaxos products in the Camarines Sur-Camarines Norte sales area.

Subsequently, Tecson entered into a romantic relationship with Bettsy, an employee of Astra Pharmaceuticals 3(Astra), a
competitor of Glaxo. Bettsy was Astras Branch Coordinator in Albay. She supervised the district managers and medical
representatives of her company and prepared marketing strategies for Astra in that area.

Even before they got married, Tecson received several reminders from his District Manager regarding the conflict of interest
which his relationship with Bettsy might engender. Still, love prevailed, and Tecson married Bettsy in September 1998.

In January 1999, Tecsons superiors informed him that his marriage to Bettsy gave rise to a conflict of interest. Tecsons
superiors reminded him that he and Bettsy should decide which one of them would resign from their jobs, although they told
him that they wanted to retain him as much as possible because he was performing his job well.

Tecson requested for time to comply with the company policy against entering into a relationship with an employee of a
competitor company. He explained that Astra, Bettsys employer, was planning to merge with Zeneca, another drug
company; and Bettsy was planning to avail of the redundancy package to be offered by Astra. With Bettsys separation from
her company, the potential conflict of interest would be eliminated. At the same time, they would be able to avail of the
attractive redundancy package from Astra.

In August 1999, Tecson again requested for more time resolve the problem. In September 1999, Tecson applied for a
transfer in Glaxos milk division, thinking that since Astra did not have a milk division, the potential conflict of interest would
be eliminated. His application was denied in view of Glaxos "least-movement-possible" policy.

In November 1999, Glaxo transferred Tecson to the Butuan City-Surigao City-Agusan del Sur sales area. Tecson asked
Glaxo to reconsider its decision, but his request was denied.

Tecson sought Glaxos reconsideration regarding his transfer and brought the matter to Glaxos Grievance Committee.
Glaxo, however, remained firm in its decision and gave Tescon until February 7, 2000 to comply with the transfer order.
Tecson defied the transfer order and continued acting as medical representative in the Camarines Sur-Camarines Norte
sales area.

During the pendency of the grievance proceedings, Tecson was paid his salary, but was not issued samples of products
which were competing with similar products manufactured by Astra. He was also not included in product conferences
regarding such products.

Because the parties failed to resolve the issue at the grievance machinery level, they submitted the matter for voluntary
arbitration. Glaxo offered Tecson a separation pay of one-half () month pay for every year of service, or a total
of P50,000.00 but he declined the offer. On November 15, 2000, the National Conciliation and Mediation Board (NCMB)
rendered its Decision declaring as valid Glaxos policy on relationships between its employees and persons employed with
competitor companies, and affirming Glaxos right to transfer Tecson to another sales territory.

Aggrieved, Tecson filed a Petition for Review with the Court of Appeals assailing the NCMB Decision.
On May 19, 2003, the Court of Appeals promulgated its Decision denying the Petition for Review on the ground that the
NCMB did not err in rendering its Decision. The appellate court held that Glaxos policy prohibiting its employees from
having personal relationships with employees of competitor companies is a valid exercise of its management prerogatives. 4

Tecson filed a Motion for Reconsideration of the appellate courts Decision, but the motion was denied by the appellate court
in its Resolution dated March 26, 2004.5

Petitioners filed the instant petition, arguing therein that (i) the Court of Appeals erred in affirming the NCMBs finding that
the Glaxos policy prohibiting its employees from marrying an employee of a competitor company is valid; and (ii) the Court
of Appeals also erred in not finding that Tecson was constructively dismissed when he was transferred to a new sales
territory, and deprived of the opportunity to attend products seminars and training sessions. 6

Petitioners contend that Glaxos policy against employees marrying employees of competitor companies violates the equal
protection clause of the Constitution because it creates invalid distinctions among employees on account only of marriage.
They claim that the policy restricts the employees right to marry. 7

They also argue that Tecson was constructively dismissed as shown by the following circumstances: (1) he was transferred
from the Camarines Sur-Camarines Norte sales area to the Butuan-Surigao-Agusan sales area, (2) he suffered a diminution
in pay, (3) he was excluded from attending seminars and training sessions for medical representatives, and (4) he was
prohibited from promoting respondents products which were competing with Astras products. 8

In its Comment on the petition, Glaxo argues that the company policy prohibiting its employees from having a relationship
with and/or marrying an employee of a competitor company is a valid exercise of its management prerogatives and does not
violate the equal protection clause; and that Tecsons reassignment from the Camarines Norte-Camarines Sur sales area to
the Butuan City-Surigao City and Agusan del Sur sales area does not amount to constructive dismissal. 9

Glaxo insists that as a company engaged in the promotion and sale of pharmaceutical products, it has a genuine interest in
ensuring that its employees avoid any activity, relationship or interest that may conflict with their responsibilities to the
company. Thus, it expects its employees to avoid having personal or family interests in any competitor company which may
influence their actions and decisions and consequently deprive Glaxo of legitimate profits. The policy is also aimed at
preventing a competitor company from gaining access to its secrets, procedures and policies. 10

It likewise asserts that the policy does not prohibit marriage per se but only proscribes existing or future relationships with
employees of competitor companies, and is therefore not violative of the equal protection clause. It maintains that
considering the nature of its business, the prohibition is based on valid grounds.11

According to Glaxo, Tecsons marriage to Bettsy, an employee of Astra, posed a real and potential conflict of interest.
Astras products were in direct competition with 67% of the products sold by Glaxo. Hence, Glaxos enforcement of the
foregoing policy in Tecsons case was a valid exercise of its management prerogatives. 12 In any case, Tecson was given
several months to remedy the situation, and was even encouraged not to resign but to ask his wife to resign form Astra
instead.13

Glaxo also points out that Tecson can no longer question the assailed company policy because when he signed his contract
of employment, he was aware that such policy was stipulated therein. In said contract, he also agreed to resign from
respondent if the management finds that his relationship with an employee of a competitor company would be detrimental to
the interests of Glaxo.14

Glaxo likewise insists that Tecsons reassignment to another sales area and his exclusion from seminars regarding
respondents new products did not amount to constructive dismissal.

It claims that in view of Tecsons refusal to resign, he was relocated from the Camarines Sur-Camarines Norte sales area to
the Butuan City-Surigao City and Agusan del Sur sales area. Glaxo asserts that in effecting the reassignment, it also
considered the welfare of Tecsons family. Since Tecsons hometown was in Agusan del Sur and his wife traces her roots to
Butuan City, Glaxo assumed that his transfer from the Bicol region to the Butuan City sales area would be favorable to him
and his family as he would be relocating to a familiar territory and minimizing his travel expenses. 15

In addition, Glaxo avers that Tecsons exclusion from the seminar concerning the new anti-asthma drug was due to the fact
that said product was in direct competition with a drug which was soon to be sold by Astra, and hence, would pose a
potential conflict of interest for him. Lastly, the delay in Tecsons receipt of his sales paraphernalia was due to the mix-up
created by his refusal to transfer to the Butuan City sales area (his paraphernalia was delivered to his new sales area
instead of Naga City because the supplier thought he already transferred to Butuan). 16
The Court is tasked to resolve the following issues: (1) Whether the Court of Appeals erred in ruling that Glaxos policy
against its employees marrying employees from competitor companies is valid, and in not holding that said policy violates
the equal protection clause of the Constitution; (2) Whether Tecson was constructively dismissed.

The Court finds no merit in the petition.

The stipulation in Tecsons contract of employment with Glaxo being questioned by petitioners provides:

10. You agree to disclose to management any existing or future relationship you may have, either by consanguinity
or affinity with co-employees or employees of competing drug companies. Should it pose a possible conflict of
interest in management discretion, you agree to resign voluntarily from the Company as a matter of Company
policy.

17

The same contract also stipulates that Tescon agrees to abide by the existing company rules of Glaxo, and to study and
become acquainted with such policies. 18 In this regard, the Employee Handbook of Glaxo expressly informs its employees of
its rules regarding conflict of interest:

1. Conflict of Interest

Employees should avoid any activity, investment relationship, or interest that may run counter to the
responsibilities which they owe Glaxo Wellcome.

Specifically, this means that employees are expected:

a. To avoid having personal or family interest, financial or otherwise, in any competitor supplier or other
businesses which may consciously or unconsciously influence their actions or decisions and thus deprive
Glaxo Wellcome of legitimate profit.

b. To refrain from using their position in Glaxo Wellcome or knowledge of Company plans to advance
their outside personal interests, that of their relatives, friends and other businesses.

c. To avoid outside employment or other interests for income which would impair their effective job
performance.

d. To consult with Management on such activities or relationships that may lead to conflict of interest.

1.1. Employee Relationships

Employees with existing or future relationships either by consanguinity or affinity with co-employees of competing
drug companies are expected to disclose such relationship to the Management. If management perceives a
conflict or potential conflict of interest, every effort shall be made, together by management and the employee, to
arrive at a solution within six (6) months, either by transfer to another department in a non-counter checking
position, or by career preparation toward outside employment after Glaxo Wellcome. Employees must be prepared
for possible resignation within six (6) months, if no other solution is feasible.19

No reversible error can be ascribed to the Court of Appeals when it ruled that Glaxos policy prohibiting an employee from
having a relationship with an employee of a competitor company is a valid exercise of management prerogative.

Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs
and information from competitors, especially so that it and Astra are rival companies in the highly competitive
pharmaceutical industry.

The prohibition against personal or marital relationships with employees of competitor companies upon Glaxos employees
is reasonable under the circumstances because relationships of that nature might compromise the interests of the company.
In laying down the assailed company policy, Glaxo only aims to protect its interests against the possibility that a competitor
company will gain access to its secrets and procedures.

That Glaxo possesses the right to protect its economic interests cannot be denied. No less than the Constitution recognizes
the right of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on investments and to
expansion and growth.20 Indeed, while our laws endeavor to give life to the constitutional policy on social justice and the
protection of labor, it does not mean that every labor dispute will be decided in favor of the workers. The law also recognizes
that management has rights which are also entitled to respect and enforcement in the interest of fair play. 21

As held in a Georgia, U.S.A case,22 it is a legitimate business practice to guard business confidentiality and protect a
competitive position by even-handedly disqualifying from jobs male and female applicants or employees who are married to
a competitor. Consequently, the court ruled than an employer that discharged an employee who was married to an
employee of an active competitor did not violate Title VII of the Civil Rights Act of 1964. 23The Court pointed out that the
policy was applied to men and women equally, and noted that the employers business was highly competitive and that
gaining inside information would constitute a competitive advantage.

The challenged company policy does not violate the equal protection clause of the Constitution as petitioners erroneously
suggest. It is a settled principle that the commands of the equal protection clause are addressed only to the state or those
acting under color of its authority.24 Corollarily, it has been held in a long array of U.S. Supreme Court decisions that the
equal protection clause erects no shield against merely private conduct, however, discriminatory or wrongful. 25 The only
exception occurs when the state29 in any of its manifestations or actions has been found to have become entwined or
involved in the wrongful private conduct. 27 Obviously, however, the exception is not present in this case. Significantly, the
company actually enforced the policy after repeated requests to the employee to comply with the policy. Indeed, the
application of the policy was made in an impartial and even-handed manner, with due regard for the lot of the employee.

In any event, from the wordings of the contractual provision and the policy in its employee handbook, it is clear that Glaxo
does not impose an absolute prohibition against relationships between its employees and those of competitor companies. Its
employees are free to cultivate relationships with and marry persons of their own choosing. What the company merely seeks
to avoid is a conflict of interest between the employee and the company that may arise out of such relationships. As
succinctly explained by the appellate court, thus:

The policy being questioned is not a policy against marriage. An employee of the company remains free to marry
anyone of his or her choosing. The policy is not aimed at restricting a personal prerogative that belongs only to the
individual. However, an employees personal decision does not detract the employer from exercising management
prerogatives to ensure maximum profit and business success. . . 28

The Court of Appeals also correctly noted that the assailed company policy which forms part of respondents Employee
Code of Conduct and of its contracts with its employees, such as that signed by Tescon, was made known to him prior to his
employment. Tecson, therefore, was aware of that restriction when he signed his employment contract and when he entered
into a relationship with Bettsy. Since Tecson knowingly and voluntarily entered into a contract of employment with Glaxo, the
stipulations therein have the force of law between them and, thus, should be complied with in good faith." 29 He is therefore
estopped from questioning said policy.

The Court finds no merit in petitioners contention that Tescon was constructively dismissed when he was transferred from
the Camarines Norte-Camarines Sur sales area to the Butuan City-Surigao City-Agusan del Sur sales area, and when he
was excluded from attending the companys seminar on new products which were directly competing with similar products
manufactured by Astra. Constructive dismissal is defined as a quitting, an involuntary resignation resorted to when
continued employment becomes impossible, unreasonable, or unlikely; when there is a demotion in rank or diminution in
pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee. 30 None of
these conditions are present in the instant case. The record does not show that Tescon was demoted or unduly
discriminated upon by reason of such transfer. As found by the appellate court, Glaxo properly exercised its management
prerogative in reassigning Tecson to the Butuan City sales area:

. . . In this case, petitioners transfer to another place of assignment was merely in keeping with the policy of the
company in avoidance of conflict of interest, and thus validNote that [Tecsons] wife holds a sensitive
supervisory position as Branch Coordinator in her employer-company which requires her to work in close
coordination with District Managers and Medical Representatives. Her duties include monitoring sales of Astra
products, conducting sales drives, establishing and furthering relationship with customers, collection, monitoring
and managing Astras inventoryshe therefore takes an active participation in the market war characterized as it
is by stiff competition among pharmaceutical companies. Moreover, and this is significant, petitioners sales
territory covers Camarines Sur and Camarines Norte while his wife is supervising a branch of her employer in
Albay. The proximity of their areas of responsibility, all in the same Bicol Region, renders the conflict of interest not
 only possible, but actual, as learning by one spouse of the others market strategies in the region would be
inevitable. [Managements] appreciation of a conflict of interest is therefore not merely illusory and wanting in
factual basis31

In Abbott Laboratories (Phils.), Inc. v. National Labor Relations Commission, 32 which involved a complaint filed by a medical
representative against his employer drug company for illegal dismissal for allegedly terminating his employment when he
refused to accept his reassignment to a new area, the Court upheld the right of the drug company to transfer or reassign its
employee in accordance with its operational demands and requirements. The ruling of the Court therein, quoted hereunder,
also finds application in the instant case:

By the very nature of his employment, a drug salesman or medical representative is expected to travel. He should
anticipate reassignment according to the demands of their business. It would be a poor drug corporation which
cannot even assign its representatives or detail men to new markets calling for opening or expansion or to areas
where the need for pushing its products is great. More so if such reassignments are part of the employment
contract.33

As noted earlier, the challenged policy has been implemented by Glaxo impartially and disinterestedly for a long period of
time. In the case at bar, the record shows that Glaxo gave Tecson several chances to eliminate the conflict of interest
brought about by his relationship with Bettsy. When their relationship was still in its initial stage, Tecsons supervisors at
Glaxo constantly reminded him about its effects on his employment with the company and on the companys interests. After
Tecson married Bettsy, Glaxo gave him time to resolve the conflict by either resigning from the company or asking his wife
to resign from Astra. Glaxo even expressed its desire to retain Tecson in its employ because of his satisfactory performance
and suggested that he ask Bettsy to resign from her company instead. Glaxo likewise acceded to his repeated requests for
more time to resolve the conflict of interest. When the problem could not be resolved after several years of waiting, Glaxo
was constrained to reassign Tecson to a sales area different from that handled by his wife for Astra. Notably, the Court did
not terminate Tecson from employment but only reassigned him to another area where his home province, Agusan del Sur,
was included. In effecting Tecsons transfer, Glaxo even considered the welfare of Tecsons family. Clearly, the foregoing
dispels any suspicion of unfairness and bad faith on the part of Glaxo. 34

WHEREFORE, the Petition is DENIED for lack of merit. Costs against petitioners.

SO ORDERED.

ARMANDO G. YRASUEGUI, G.R. No. 168081

Petitioner,
Present:
YNARES-SANTIAGO, J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.

Promulgated:
PHILIPPINE AIRLINES, INC.,
Respondent. October 17, 2008

x--------------------------------------------------x

DECISION
REYES, R.T., J.:

THIS case portrays the peculiar story of an international flight steward who
was dismissed because of his failure to adhere to the weight standards of the airline
company.

He is now before this Court via a petition for review on certiorari claiming
that he was illegally dismissed. To buttress his stance, he argues that (1) his
dismissal does not fall under 282(e) of the Labor Code; (2) continuing adherence to
the weight standards of the company is not a bona fide occupational qualification;
and (3) he was discriminated against
because other overweight employees were promoted instead of being disciplined.

After a meticulous consideration of all arguments pro and con, We uphold the
legality of dismissal. Separation pay, however, should be awarded in favor of the
employee as an act of social justice or based on equity. This is so because his
dismissal is not for serious misconduct. Neither is it reflective of his moral
character.

The Facts

Petitioner Armando G. Yrasuegui was a former international flight

steward of Philippine Airlines, Inc. (PAL). He stands five feet and eight inches
(58) with a large body frame. The proper weight for a man of his height and body
structure is from 147 to 166 pounds, the ideal weight being 166 pounds, as
mandated by the Cabin and Crew Administration Manual[1] of PAL.

The weight problem of petitioner dates back to 1984. Back

then, PAL advised him to go on an extended vacation leave from December 29,
1984 to March 4, 1985 to address his weight concerns. Apparently, petitioner
failed to meet the companys weight standards, prompting another leave without
pay from March 5, 1985 to November 1985.

After meeting the required weight, petitioner was allowed to return to

work. But petitioners weight problem recurred. He again went on leave without
pay from October 17, 1988 to February 1989.

On April 26, 1989, petitioner weighed 209 pounds, 43 pounds over his ideal
weight. In line with company policy, he was removed from flight duty
effective May 6, 1989to July 3, 1989. He was formally requested to trim down to
his ideal weight and report for weight checks on several
dates. He was also told that he may avail of the services of the company physician
should he wish to do so. He was advised that his case will be evaluated on July 3,
1989.[2]

On February 25, 1989, petitioner underwent weight check. It was discovered

that he gained, instead of losing, weight. He was overweight at 215 pounds, which
is 49 pounds beyond the limit. Consequently, his off-duty status was retained.

On October 17, 1989, PAL Line Administrator Gloria Dizon personally

visited petitioner at his residence to check on the progress of his effort to lose
weight. Petitioner weighed 217 pounds, gaining 2 pounds from his previous
weight. After the visit, petitioner made a commitment[3] to reduce weight in a letter
addressed to Cabin Crew Group Manager Augusto Barrios. The letter, in full,
reads:

Dear Sir:

I would like to guaranty my commitment towards a weight loss

from 217 pounds to 200 pounds from today until 31 Dec. 1989.

From thereon, I promise to continue reducing at a reasonable

percentage until such time that my ideal weight is achieved.

Likewise, I promise to personally report to your office at the

designated time schedule you will set for my weight check.

Respectfully Yours,
F/S Armando Yrasuegui[4]

Despite the lapse of a ninety-day period given him to reach his ideal weight,
petitioner remained overweight. On January 3, 1990, he was informed of
the PAL decision for him to remain grounded until such time that he satisfactorily
complies with the weight standards. Again, he was directed to report every two
weeks for weight checks.

Petitioner failed to report for weight checks. Despite that, he was given one
more month to comply with the weight requirement. As usual, he was asked to
report for weight check on different dates. He was reminded that his grounding
would continue pending satisfactory compliance with the weight standards.[5]

Again, petitioner failed to report for weight checks, although he was seen
submitting his passport for processing at the PAL Staff Service Division.

On April 17, 1990, petitioner was formally warned that a repeated refusal to
report for weight check would be dealt with accordingly. He was given another set
of weight check dates.[6] Again, petitioner ignored the directive and did not report
for weight checks. On June 26, 1990, petitioner was required to explain his refusal
to undergo weight checks.[7]
 When petitioner tipped the scale on July 30, 1990, he weighed at 212
pounds. Clearly, he was still way over his ideal weight of 166 pounds.

From then on, nothing was heard from petitioner until he followed up his
case requesting for leniency on the latter part of 1992. He weighed at 219
pounds on August 20, 1992 and 205 pounds on November 5, 1992.

On November 13, 1992, PAL finally served petitioner a Notice of

Administrative Charge for violation of company standards on weight
requirements. He was given ten (10) days from receipt of the charge within which
to file his answer and submit controverting evidence.[8]

On December 7, 1992, petitioner submitted his Answer.[9] Notably, he did

not deny being overweight. What he claimed, instead, is that his
violation, if any, had already been condoned by PAL since no action has been
taken by the company regarding his case since 1988. He also claimed
that PAL discriminated against him because the company has not been fair in
treating the cabin crew members who are similarly situated.

On December 8, 1992, a clarificatory hearing was held where petitioner

manifested that he was undergoing a weight reduction program to lose at least two
(2) pounds per week so as to attain his ideal weight.[10]

On June 15, 1993, petitioner was formally informed by PAL that due to his
inability to attain his ideal weight, and considering the utmost leniency extended to
him which spanned a period covering a total of almost five (5) years, his services
were considered terminated effective immediately.[11]

His motion for reconsideration having been denied,[12] petitioner filed a

complaint for illegal dismissal against PAL.

Labor Arbiter, NLRC and CA Dispositions

On November 18, 1998, Labor Arbiter Valentin C. Reyes ruled[13] that

petitioner was illegally dismissed. The dispositive part of the Arbiter ruling runs as
follows:
 WHEREFORE, in view of the foregoing, judgment is hereby
rendered, declaring the complainants dismissal illegal, and ordering the
respondent to reinstate him to his former position or substantially
equivalent one, and to pay him:

a. Backwages of Php10,500.00 per month from his dismissal

on June 15, 1993 until reinstated, which for purposes of appeal is hereby
set from June 15, 1993 up to August 15, 1998 atP651,000.00;

b. Attorneys fees of five percent (5%) of the total award.

SO ORDERED.[14]

The Labor Arbiter held that the weight standards of PAL are reasonable in
view of the nature of the job of petitioner.[15] However, the weight standards need
not be complied with under pain of dismissal since his weight did not hamper the
performance of his duties.[16] Assuming that it did, petitioner could be transferred
to other positions where his weight would not be a negative factor.[17] Notably,
other overweight employees, i.e., Mr. Palacios, Mr. Cui, and Mr. Barrios, were
promoted instead of being disciplined.[18]

Both parties appealed to the National Labor Relations Commission

(NLRC).[19]

On October 8, 1999, the Labor Arbiter issued a writ of execution directing

the reinstatement of petitioner without loss of seniority rights and other benefits.[20]

On February 1, 2000, the Labor Arbiter denied[21] the Motion to Quash Writ
of Execution[22] of PAL.

On March 6, 2000, PAL appealed the denial of its motion to quash to the
NLRC.[23]

On June 23, 2000, the NLRC rendered judgment[24] in the following tenor:

WHEREFORE, premises considered[,] the Decision of the

Arbiter dated 18 November 1998 as modified by our findings herein, is
hereby AFFIRMED and that part of the dispositive portion of said
 decision concerning complainants entitlement to backwages shall be
deemed to refer to complainants entitlement to his
full backwages, inclusive of allowances and to his other benefits or their
monetary equivalent instead of simply backwages, from date of
dismissal until his actual reinstatement or finality hereof. Respondent is
enjoined to manifests (sic) its choice of the form of the reinstatement of
complainant, whether physical or through payroll within ten (10) days
from notice failing which, the same shall be deemed as complainants
reinstatement through payroll and execution in case of non-payment
shall accordingly be issued by the Arbiter. Both appeals of respondent
thus, are DISMISSED for utter lack of merit.[25]

According to the NLRC, obesity, or the tendency to gain weight

uncontrollably regardless of the amount of food intake, is a disease in itself.[26] As
a consequence, there can be no intentional defiance or serious misconduct by
petitioner to the lawful order of PAL for him to lose weight.[27]

Like the Labor Arbiter, the NLRC found the weight standards of PAL to be
reasonable. However, it found as unnecessary the Labor Arbiter holding that
petitioner was not remiss in the performance of his duties as flight steward despite
being overweight. According to the NLRC, the Labor Arbiter should have
limited himself to the issue of whether the failure of petitioner to attain his ideal
weight constituted willful defiance of the weight standards of PAL.[28]

PAL moved for reconsideration to no avail.[29] Thus, PAL elevated the

matter to the Court of Appeals (CA) via a petition for certiorari under Rule 65 of
the 1997 Rules of Civil Procedure.[30]

By Decision dated August 31, 2004, the CA reversed[31] the NLRC:

WHEREFORE, premises considered, we hereby GRANT the

petition. The assailed NLRC decision is declared NULL and VOID and
is hereby SET ASIDE. The private respondents complaint is hereby
DISMISSED. No costs.

SO ORDERED.[32]
 The CA opined that there was grave abuse of discretion on the part of the
NLRC because it looked at wrong and irrelevant considerations[33] in evaluating the
evidence ofthe parties. Contrary to the NLRC ruling, the weight standards
of PAL are meant to be a continuing qualification for an employees
position.[34] The failure to adhere to the weight standards is an analogous cause for
the dismissal of an employee under Article 282(e) of the Labor Code in relation to
Article 282(a). It is not willful disobedience as the NLRC seemed to
suggest.[35] Said the CA, the element of willfulness that the NLRC decision cites is
an irrelevant consideration in arriving at a conclusion on whether the dismissal is
legally proper.[36] In other words, the relevant question to ask is not one of
willfulness but one of reasonableness of the standard and whether or not the
employee qualifies or continues to qualify under this standard.[37]

Just like the Labor Arbiter and the NLRC, the CA held that the weight standards
of PAL are reasonable.[38] Thus, petitioner was legally dismissed because he
repeatedly failed to meet the prescribed weight standards.[39] It is obvious that the
issue of discrimination was only invoked by petitioner for purposes of escaping the
result of his dismissal for being overweight.[40]

On May 10, 2005, the CA denied petitioners motion for

reconsideration.[41] Elaborating on its earlier ruling, the CA held that the weight
standards of PAL are a bona fide occupational qualification which, in case of
violation, justifies an employees separation from the service.[42]

Issues

In this Rule 45 petition for review, the following issues are posed for resolution:

I.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY
ERRED IN HOLDING THAT PETITIONERS OBESITY CAN BE A
GROUND FOR DISMISSAL UNDER PARAGRAPH (e) OF
ARTICLE 282 OF THE LABOR CODE OF THE PHILIPPINES;

II.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY
ERRED IN HOLDING THAT PETITIONERS DISMISSAL FOR
 OBESITY CAN BE PREDICATED ON THE BONA FIDE
OCCUPATIONAL QUALIFICATION (BFOQ) DEFENSE;

III.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED
IN HOLDING THAT PETITIONER WAS NOT UNDULY
DISCRIMINATED AGAINST WHEN HE WAS DISMISSED WHILE
OTHER OVERWEIGHT CABIN ATTENDANTS WERE EITHER
GIVEN FLYING DUTIES OR PROMOTED;

IV.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY
ERRED WHEN IT BRUSHED ASIDE PETITIONERS CLAIMS FOR
REINSTATEMENT [AND] WAGES ALLEGEDLY FOR BEING
MOOT AND ACADEMIC.[43] (Underscoring supplied)

Our Ruling

I. The obesity of petitioner is a ground for dismissal under Article

282(e) [44] of the Labor Code.

A reading of the weight standards of PAL would lead to no other conclusion than
that they constitute a continuing qualification of an employee in order to keep the
job. Tersely put, an employee may be dismissed the moment he is unable to
comply with his ideal weight as prescribed by the weight standards. The dismissal
of the employee would thus fall under Article 282(e) of the Labor Code. As
explained by the CA:

x x x [T]he standards violated in this case were not mere orders of the employer;
they were the prescribed weights that a cabin crew must maintain in order to
qualify for and keep his or her position in the company. In other words, they
were standards that establish continuing qualifications for an employees
position. In this sense, the failure to maintain these standards does not fall under
Article 282(a) whose express terms require the element of willfulness in order to
be a ground for dismissal. The failure to meet the employers qualifying
standards is in fact a ground that does not squarely fall under grounds (a) to (d)
and is therefore one that falls under Article 282(e) the other causes analogous to
the foregoing.

By its nature, these qualifying standards are norms that apply prior to and
after an employee is hired. They apply prior to employment because these are the
standards a job applicant must initially meet in order to be hired. They apply after
 hiring because an employee must continue to meet these standards while on the
job in order to keep his job. Under this perspective, a violation is not one of the
faults for which an employee can be dismissed pursuant to pars. (a) to (d) of
Article 282; the employee can be dismissed simply because he no longer qualifies
for his job irrespective of whether or not the failure to qualify was willful or
intentional. x x x[45]

Petitioner, though, advances a very interesting argument. He claims that obesity is

a physical abnormality and/or illness.[46] Relying
on Nadura v. Benguet Consolidated, Inc.,[47] he says his dismissal is illegal:

Conscious of the fact that Naduras case cannot be made to fall squarely within the
specific causes enumerated in subparagraphs 1(a) to (e), Benguet invokes the
provisions of subparagraph 1(f) and says that Naduras illness occasional attacks
of asthma is a cause analogous to them.

Even a cursory reading of the legal provision under consideration is sufficient to

convince anyone that, as the trial court said, illness cannot be included as an
analogous cause by any stretch of imagination.

It is clear that, except the just cause mentioned in sub-paragraph 1(a), all the
others expressly enumerated in the law are due to the voluntary and/or willful act
of the employee. How Nadurasillness could be considered as analogous to any of
them is beyond our understanding, there being no claim or pretense that the same
was contracted through his own voluntary act.[48]

The reliance on Nadura is off-tangent. The factual milieu in Nadura is

substantially different from the case at bar. First, Nadura was not decided under
the Labor Code. The law applied in that case was Republic Act (RA) No.
1787. Second, the issue of flight safety is absent in Nadura, thus, the rationale
there cannot apply here. Third, in Nadura, the employee who was a miner, was laid
off from work because of illness, i.e., asthma. Here, petitioner was dismissed for
his failure to meet the weight standards of PAL. He was not dismissed due to
illness. Fourth, the issue in Nadura is whether or not the dismissed employee is
entitled to separation pay and damages. Here, the issue centers on the propriety of
the dismissal of petitioner for his failure to meet the weight standards
of PAL. Fifth, in Nadura, the employee was not accorded due process. Here,
petitioner was accorded utmost leniency. He was given more than four (4) years to
comply with the weight standards of PAL.

In the case at bar, the evidence on record militates against petitioners claims
that obesity is a disease. That he was able to reduce his weight from 1984 to 1992
clearly shows that it is possible for him to lose weight given the proper attitude,
determination, and self-discipline. Indeed, during the clarificatory hearing
on December 8, 1992, petitioner himself claimed that [t]he issue is could I bring
my weight down to ideal weight which is 172, then the answer is yes. I can do it
now.[49]

True, petitioner claims that reducing weight is costing him a lot of

expenses.[50] However, petitioner has only himself to blame. He could have easily
availed the assistance of the company physician, per the advice of PAL.[51] He
chose to ignore the suggestion. In fact, he repeatedly failed to report when required
to undergo weight checks, without offering a valid explanation. Thus, his
fluctuating weight indicates absence of willpower rather than an illness.

Petitioner cites Bonnie Cook v. State of Rhode Island, Department of Mental

Health, Retardation and Hospitals,[52] decided by the United States Court of
Appeals (First Circuit). In that case, Cook worked from 1978 to 1980 and from
1981 to 1986 as an institutional attendant for the mentally retarded at the Ladd
Center that was being operated by respondent. She twice resigned voluntarily with
an unblemished record. Even respondent admitted that her performance met the
Centers legitimate expectations. In 1988, Cook re-applied for a similar position. At
that time, she stood 52 tall and weighed over 320 pounds. Respondent claimed that
the morbid obesity of plaintiff compromised her ability to evacuate patients in case
of emergency and it also put her at greater risk of serious diseases.

Cook contended that the action of respondent amounted to discrimination on

the basis of a handicap. This was in direct violation of Section 504(a) of the
Rehabilitation Act of 1973,[53] which incorporates the remedies contained in Title
VI of the Civil Rights Act of 1964. Respondent claimed, however, that morbid
obesity could never constitute a handicap within the purview of the Rehabilitation
Act. Among others, obesity is a mutable condition, thus plaintiff could simply lose
weight and rid herself of concomitant disability.

The appellate Court disagreed and held that morbid obesity is a disability
under the Rehabilitation Act and that respondent discriminated against Cook based
on perceived disability. The evidence included expert testimony that morbid
obesity is a physiological disorder. It involves a dysfunction of both the metabolic
system and the neurological appetite suppressing signal system, which is capable
of causing adverse effects within the musculoskeletal, respiratory, and
cardiovascular systems. Notably, the Court stated that mutability is relevant only in
determining the substantiality of the limitation flowing from a given impairment,
thus mutability only precludes those conditions that an individual can easily and
quickly reverse by behavioral alteration.

Unlike Cook, however, petitioner is not morbidly obese. In the words of the
District Court for the District of Rhode Island, Cook was sometime before 1978 at
least one hundred pounds more than what is considered appropriate of her
height. According to the Circuit Judge, Cook weighed over 320 pounds in
1988. Clearly, that is not the case here.At his heaviest, petitioner was only less than
50 pounds over his ideal weight.

In fine, We hold that the obesity of petitioner, when placed in the context of
his work as flight attendant, becomes an analogous cause under Article 282(e) of
the Labor Code that justifies his dismissal from the service. His obesity may not be
unintended, but is nonetheless voluntary. As the CA correctly puts it,
[v]oluntariness basically means that the just cause is solely attributable to the
employee without any external force influencing or controlling his actions. This
element runs through all just causes under Article 282, whether they be in the
nature of a wrongful action or omission. Gross and habitual neglect, a recognized
just cause, is considered voluntary although it lacks the element of intent found in
Article 282(a), (c), and (d).[54]

II. The dismissal of petitioner can be predicated on the bona fide

occupational qualification defense.

Employment in particular jobs may not be limited to persons of a particular sex,

religion, or national origin unless the employer can show that sex, religion, or
national origin is an actual qualification for performing the job. The qualification is
called a bona fide occupational qualification (BFOQ).[55] In the United States, there
are a few federal and many state job discrimination laws that contain an exception
allowing an employer to engage in an otherwise unlawful form of prohibited
discrimination when the action is based on a BFOQ necessary to the normal
operation of a business or enterprise.[56]
Petitioner contends that BFOQ is a statutory defense. It does not exist if
there is no statute providing for it.[57] Further, there is no existing BFOQ statute
that could justify his dismissal.[58]

Both arguments must fail.

 First, the Constitution,[59] the Labor Code,[60] and RA No. 7277[61] or the
Magna Carta for Disabled Persons[62] contain provisions similar to BFOQ.

Second, in British Columbia Public Service Employee Commission (BSPSERC)

v. The British Columbia Government and Service Employees Union
(BCGSEU),[63] the Supreme Court of Canada adopted the so-called Meiorin Test in
determining whether an employment policy is justified. Under this test, (1) the
employer must show that it adopted the standard for a purpose rationally connected
to the performance of the job;[64] (2) the employer must establish that the standard
is reasonably necessary[65] to the accomplishment of that work-related purpose; and
(3) the employer must establish that the standard is reasonably necessary in order
to accomplish the legitimate work-related purpose. Similarly, in Star Paper
Corporation v. Simbol,[66] this Court held that in order to justify a BFOQ, the
employer must prove that (1) the employment qualification is reasonably related to
the essential operation of the job involved; and (2) that there is factual basis for
believing that all or substantially all persons meeting the qualification would be
unable to properly perform the duties of the job.[67]

In short, the test of reasonableness of the company policy is used because it

is parallel to BFOQ.[68] BFOQ is valid provided it reflects an inherent quality
reasonably necessary for satisfactory job performance.[69]

In Duncan Association of Detailman-PTGWTO

[70]
v. Glaxo Wellcome Philippines, Inc., the Court did not hesitate to pass upon the
validity of a company policy which prohibits its employees from marrying
employees of a rival company. It was held that the company policy is reasonable
considering that its purpose is the protection of the interests of the company against
possible competitor infiltration on its trade secrets and procedures.

Verily, there is no merit to the argument that BFOQ cannot be applied if it

has no supporting statute. Too, the Labor Arbiter,[71] NLRC,[72] and CA[73] are one
in holding that the weight standards of PAL are reasonable. A common carrier,
from the nature of its business and for reasons of public policy, is bound to observe
extraordinary diligence for the safety of the passengers it transports.[74] It is bound
to carry its passengers safely as far as human care and foresight can provide, using
the utmost diligence of very cautious persons, with due regard for all the
circumstances.[75]

The law leaves no room for mistake or oversight on the part of a common
carrier. Thus, it is only logical to hold that the weight standards of PAL show its
effort to comply with the exacting obligations imposed upon it by law by virtue of
being a common carrier.
The business of PAL is air transportation. As such, it has committed itself to
safely transport its passengers. In order to achieve this, it must necessarily rely on
its employees, most particularly the cabin flight deck crew who are on board the
aircraft. The weight standards of PAL should be viewed as imposing strict norms
of discipline upon its employees.

In other words, the primary objective of PAL in the imposition of the weight
standards for cabin crew is flight safety. It cannot be gainsaid that cabin attendants
must maintain agility at all times in order to inspire passenger confidence on their
ability to care for the passengers when something goes wrong. It is not farfetched
to say that airline companies, just like all common carriers, thrive due to public
confidence on their safety records. People, especially the riding public, expect no
less than that airline companiestransport their passengers to their respective
destinations safely and soundly. A lesser performance is unacceptable.

The task of a cabin crew or flight attendant is not limited to serving meals or
attending to the whims and caprices of the passengers. The most important activity
of the cabin crew is to care for the safety of passengers and the evacuation of the
aircraft when an emergency occurs. Passenger safety goes to the core of the job of
a cabin attendant.Truly, airlines need cabin attendants who have the necessary
strength to open emergency doors, the agility to attend to passengers in cramped
working conditions, and the stamina to withstand grueling flight schedules.

On board an aircraft, the body weight and size of a cabin attendant are
important factors to consider in case of emergency. Aircrafts have constricted
cabin space, and narrow aisles and exit doors. Thus, the arguments of respondent
that [w]hether the airlines flight attendants are overweight or not has no direct
relation to its mission of transporting passengers to their destination; and that the
weight standards has nothing to do with airworthiness of respondents airlines, must
fail.

The rationale in Western Air Lines v. Criswell[76] relied upon by petitioner

cannot apply to his case. What was involved there were two (2) airline pilots who
were denied reassignment as flight engineers upon reaching the age of 60, and a
flight engineer who was forced to retire at age 60. They sued the airline company,
alleging that the age-60 retirement for flight engineers violated the Age
Discrimination in Employment Act of 1967. Age-based BFOQ and being
overweight are not the same. The case of overweight cabin attendants is another
matter. Given the cramped cabin space and narrow aisles and emergency exit doors
of the airplane, any overweight cabin attendant would certainly have difficulty
navigating the cramped cabin area.

In short, there is no need to individually evaluate their ability to perform

their task. That an obese cabin attendant occupies more space than a slim one is an
unquestionable fact which courts can judicially recognize without introduction of
evidence.[77] It would also be absurd to require airline companies to reconfigure the
aircraft in order to widen the aisles and exit doors just to accommodate overweight
cabin attendants like petitioner.

The biggest problem with an overweight cabin attendant is the possibility of

impeding passengers from evacuating the aircraft, should the occasion call for
it. The job of a cabin attendant during emergencies is to speedily get the passengers
out of the aircraft safely. Being overweight necessarily impedes
mobility. Indeed, in an emergency situation, seconds are what cabin attendants are
dealing with, not minutes. Three lost seconds can translate into three lost
lives. Evacuation might slow down just because a wide-bodied cabin attendant is
blocking the narrow aisles. These possibilities are not remote.

Petitioner is also in estoppel. He does not dispute that the weight standards
of PAL were made known to him prior to his employment. He is presumed to
know the weight limit that he must maintain at all times.[78] In
fact, never did he question the authority of PAL when he was repeatedly asked to
trim down his weight. Bona fides exigit ut quodconvenit fiat. Good faith demands
that what is agreed upon shall be
done. Kung ang tao ay tapat kanyang tutuparin ang napagkasunduan.

Too, the weight standards of PAL provide for separate weight limitations
based on height and body frame for both male and female cabin attendants. A
progressive discipline is imposed to allow non-compliant cabin attendants
sufficient opportunity to meet the weight standards. Thus, the clear-cut rules
obviate any possibility for thecommission of abuse or arbitrary action on the part
of PAL.

III. Petitioner failed to substantiate his claim that he was discriminated

against by PAL.
 Petitioner next claims that PAL is using passenger safety as a convenient
excuse to discriminate against him.[79] We are constrained, however, to hold
otherwise. We agree with the CA that [t]he element of
discrimination came into play in this case as a secondary position for the private
respondent in order to escape the consequence of dismissal that being overweight
entailed. It is a confession-and-avoidance position that impliedly admitted the
cause of dismissal, including the reasonableness of the applicable standard and the
private respondents failure to comply.[80] It is a basic rule in evidence that each
party must prove his affirmative allegation.[81]
Since the burden of evidence lies with the party who asserts an affirmative
allegation, petitioner has to prove his allegation with particularity. There is nothing
on the records which could support the finding of discriminatory treatment.
Petitioner cannot establish discrimination by simply naming the supposed cabin
attendants who are allegedly similarly situated with him. Substantial proof must be
shown as to how and why they are similarly situated and the differential treatment
petitioner got from PAL despite the similarity of his situation with other
employees.

Indeed, except for pointing out the names of the supposed overweight cabin
attendants, petitioner miserably failed to indicate their respective ideal weights;
weights over their ideal weights; the periods they were allowed to fly despite their
being overweight; the particular flights assigned to them; the discriminating
treatment they got from PAL; and other relevant data that could have adequately
established a case of discriminatory treatment by PAL. In the words of the
CA, PAL really had no substantial case of discrimination to meet.[82]

We are not unmindful that findings of facts of administrative agencies, like

the Labor Arbiter and the NLRC, are accorded respect, even finality.[83] The reason
is simple: administrative agencies are experts in matters within their specific and
specialized jurisdiction.[84] But the principle is not a hard and fast rule. It only
applies if the findings of facts are duly supported by substantial evidence. If it can
be shown that administrative bodies grossly misappreciated evidence of such
nature so as to compel a conclusion to the contrary, their findings of facts must
necessarily be reversed. Factual findings of administrative agencies do not have
infallibility and must be set aside when they fail the test of arbitrariness.[85]

Here, the Labor Arbiter and the NLRC

inexplicably misappreciated evidence. We thus annul their findings.
 To make his claim more believable, petitioner invokes the equal protection
clause guaranty[86] of the Constitution. However, in the absence of governmental
interference, the liberties guaranteed by the Constitution cannot be invoked.[87] Put
differently, the Bill of Rights is not meant to be invoked against acts of private
individuals.[88] Indeed, the United States Supreme Court, in interpreting the
Fourteenth Amendment,[89] which is the source of our equal protection guarantee,
is consistent in saying that
the equalprotection erects no shield against private conduct, however
discriminatory or wrongful.[90] Private actions, no matter how egregious, cannot
violate the equal protection guarantee.[91]

IV. The claims of petitioner for reinstatement and wages are moot.

As his last contention, petitioner avers that his claims for reinstatement and wages
have not been mooted. He is entitled to reinstatement and his full backwages, from
the time he was illegally dismissed up to the time that the NLRC was reversed by
the CA.[92]

At this point, Article 223 of the Labor Code finds relevance:

In any event, the decision of the Labor Arbiter reinstating a dismissed or

separated employee, insofar as the reinstatement aspect is concerned, shall
immediately be executory, even pending appeal. The employee shall either be
admitted back to work under the same terms and conditions prevailing prior to his
dismissal or separation or, at the option of the employer, merely reinstated in the
payroll. The posting of a bond by the employer shall not stay the execution for
reinstatement provided herein.

The law is very clear. Although an award or order of reinstatement is self-

executory and does not require a writ of execution,[93] the option to exercise actual
reinstatement or payroll reinstatement belongs to the employer. It does not belong
to the employee, to the labor tribunals, or even to the courts.

Contrary to the allegation of petitioner that PAL did everything under the
sun to frustrate his immediate return to his previous position,[94] there is evidence
that PALopted to physically reinstate him to a substantially equivalent position in
accordance with the order of the Labor
Arbiter.[95] In fact, petitioner duly received the return to work notice on February
23, 2001, as shown by his signature.[96]

Petitioner cannot take refuge in the pronouncements of the Court in a

[97]
case that [t]he unjustified refusal of the employer to reinstate the dismissed
employee entitles him to payment of his salaries effective from the time the
employer failed to reinstate him despite the issuance of a writ of execution[98] and
even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is
obligatory on the part of the employer to reinstate and pay the wages of the
employee during the period of appeal until reversal by the higher court.[99] He
failed to prove that he complied with the return to work order of PAL. Neither does
it appear on record that he actually rendered services for PAL from the moment he
was dismissed, in order to insist on the payment of his full backwages.

In insisting that he be reinstated to his actual position despite being

overweight, petitioner in effect wants to render the issues in the present case
moot. He asks PAL to comply with the impossible. Time and again, the Court
ruled that the law does not exact compliance with the impossible.[100]

V. Petitioner is entitled to separation pay.

Be that as it may, all is not lost for petitioner.

Normally, a legally dismissed employee is not entitled to separation

pay. This may be deduced from the language of Article 279 of the Labor Code that
[a]n 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. Luckily for petitioner, this is not an ironclad
rule.

Exceptionally, separation pay is granted to a legally dismissed employee as

an act social justice,[101] or based on equity.[102] In both instances, it is required that
the dismissal (1) was not for serious misconduct; and (2) does not reflect on the
moral character of the employee.[103]

Here, We grant petitioner separation pay equivalent to one-half (1/2) months

pay for every year of service.[104] It should include regular allowances which he
might have been receiving.[105] We are not blind to the fact that he was not
dismissed for any serious misconduct or to any act which would reflect on his
moral character. We also recognize that his employment with PAL lasted for more
or less a decade.

WHEREFORE, the appealed Decision of the Court of Appeals

is AFFIRMED but MODIFIED in that petitioner Armando G. Yrasuegui is
entitled to separation pay in an amount equivalent to one-half (1/2) months pay for
every year of service, which should include his regular allowances.

SO ORDERED.

G.R. No. 127553 November 28, 1997

EDDIE MANUEL, ROMEO BANA, ROGELIO PAGTAMA, JR. and JOEL REA, petitioners,
vs.
N.C. CONSTRUCTION SUPPLY, JOHNNY LIM, ANITA SY and NATIONAL LABOR RELATIONS COMMISSION
(SECOND DIVISION), respondents.

PUNO, J.:

This special civil action for certiorari seeks to review the decision of the National Labor Relations Commission (NLRC) dated
June 27, 1996 in NLRC-NCR-00-07-04925-95 entitled Eddie Manuel, Romeo Bana, Rogelio Pagtama, Jr. and Joel Rea v.
N.C. Construction Supply, Johnny Lim and Anita Sy. 1

Petitioners Eddie Manuel, Romeo Bana, Rogelio Pagtama, Jr. and Joel Rea were employed as drivers at N.C. Construction
Supply owned by private respondents Johnny Lim (a.k.a. Lao Ching Eng) and Anita Sy.

On June 3, 1995, the security guards of respondent company caught Aurelio Guevara, a company driver, and Jay Calso, his
helper ("pahinante"), taking out from the company premises two rolls of electrical wire worth P500.00 without authority.
Calso was brought to the Pasig Police station for questioning. During the investigation, Calso named seven other employees
who were allegedly involved in a series of thefts at respondent company, among them petitioners Manuel, Bana, Pagtama,
Jr. and Rea. 2

On June 5, 1995, petitioners received separate notices from respondent company informing them that they were positively
identified by their co-worker, Jay Calso, as perpetrators of the series of thefts committed at respondent company. They were
thus invited to the Pasig police station for investigation regarding their alleged involvement in the offense.

Atty. Ramon Reyes, private respondents' counsel conducted in their behalf an investigation regarding petitioners'
involvement in the theft. Atty. Reyes interrogated the petitioners on their alleged participation in the series of thefts
committed at respondent company. Petitioners initially denied the charge. However, after being positively identified by Jay
Calso, petitioners admitted their guilt and offered to resign in exchange for the withdrawal of any criminal charge against
them. 3 Petitioners Bana and Rea filed separate resignation letters while petitioners Manuel and Pagtama,
Jr. tendered their resignations orally. Petitioner Bana's resignation letter 4 reads:
 Dear Bong,

Sa ganitong sitwasyon nagpapasalamat rin ako na humantong sa ganito para hindi na tumagal ang
masama naming gawain. Piro lubos rin ako nagpapasalamat sa iyong pagpapatawad sa akin, at ang
masasabi ko lang na I'm very, very sorry na lang. Kasi alam mo naman na kapos na kapos talaga ako.
Kaya alam mo halos hindi na nga ako nag-a-absent dahil sa sahod ko lang kapos pa sa pamilya ko.
Kaya sana sa pag-resign ko sana mabigyan mo man lang ako nang kaunti para makapamasahi man lang
pau-wi sa Mindanao kasama ang mga anak ko. Yon lang. . .

Petitioner Rea's resignation letter, 5 on the other hand, states:

Boss,

Dahil sa hindi maganda ang aking naging performance sa inyo sa loob ng NC Construction Supply sa
nakakahiya na aking nasangkutan magreresign na ho ako, magsisimula Hunyo 6, 1995. Siguro naman
Boss alam naman ninyo ang totoo nakikisama lang ako sa mga dati ninyong tauhan dahil kailangan ko
talaga ng trabaho kahit labag man sa aking kalooban ang gumawa ng hindi maganda.
 Boss, kahit paano sana maintindihan mo ako, tatanggalin nyo na ho ako sana bigyan nyo na lang ako ng
kahit pamasahe namin pauwing probinsya para makapagbagong buhay na ako.

Salamat po.

Atty. Reyes accepted petitioners' resignation effective June 5, 1995.

On July 17, 1995, petitioners filed a complaint against private respondents for illegal dismissal. Petitioners alleged that they
were not informed of the charge against them nor were they given an opportunity to dispute the same. They also alleged
that their admission made at the Pasig police station regarding their involvement in the theft as well as their resignation were
not voluntary but were obtained by private respondents' lawyer by means of threat and intimidation.

Labor Arbiter Manuel R. Caday ruled in favor of petitioners and found their dismissal to be illegal. He held that private
respondents failed to show a just cause for the termination of petitioners' services. He declared that petitioners' admission
regarding their involvement in the theft was inadmissible in evidence as it was taken without the assistance of counsel, in
violation of Section 12 Article III of the 1987 Constitution. 6 He also held that petitioners were not afforded due
process before their services were terminated. Hence, Labor Arbiter Caday ordered private respondents
to reinstate petitioners to their former position without loss of seniority rights and to pay them full
backwages. He also ordered private respondents to pay petitioners their service incentive leave benefits
plus attorney's fees. 7

On appeal, the NLRC reversed the decision of the Labor Arbiter. It ruled that petitioners were dismissed for a just cause. It
held that petitioners failed to adduce competent evidence to show a vitiation of their admission regarding their participation
in the theft. It further stated that such admission may be admitted in evidence because Section 12 Article III of the 1987
Constitution applies only to criminal proceedings but not to administrative proceedings. The NLRC, however, agreed with the
Labor Arbiter that petitioners were denied due process. Hence, it ordered private respondents to pay petitioners the amount
of P1,000.00 as indemnity. The dispositive portion of the decision reads:

WHEREFORE, premises duly considered, the decision appealed from is hereby reversed and set aside.
A new one is hereby entered ordering respondents to pay to the complainants the amount of P1,000.00
each as and for indemnity for failure of the respondents to observe due process.

SO ORDERED. 8

Petitioners filed the instant petition on the following grounds:

1. The National Labor Relations Commission committed grave abuse of discretion in

declaring the dismissal legal;
 2. The National Labor Relations Commission committed grave abuse of discretion in
declaring that the admission of petitioners is admissible in evidence despite the fact
that it was obtained in a hostile environment and without the presence or assistance
of counsel;

3. The National Labor Relations Commission committed grave abuse of discretion in

finding that respondents N.C. Construction Supply et al. are right in withdrawing their
trust and confidence with petitioners without any valid and legal basis. 9

We affirm the decision of the NLRC.

An employer has a right to terminate the services of an employee subject to both substantive and procedural limitations.
This means that (1) the dismissal must be for a just or authorized cause provided in the Labor Code, 10and (2) the
employee must be accorded due process before his employment is terminated. The validity of the
dismissal hinges on the employer's compliance with these two requirements. 11

In the case at bar, petitioners who were employed as drivers at respondent company were found guilty of stealing company
property consisting of electrical wire, welding rod, G.I. sheet, steel bar and plywood. Article 282 of the Labor Code
authorizes an employer to terminate the services of an employee for loss of trust and confidence, provided that the loss of
confidence arises from particular proven facts. The law does not require proof beyond reasonable doubt of the employee's
misconduct. Substantial evidence is sufficient. 12 Substantial evidence has been defined as such relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion. 13

Petitioners' culpability in the instant case was sufficiently proved by private respondents. Jay Calso, an employee of
respondent company who has personal knowledge about the series of thefts that has been going on at respondent
company, positively identified petitioners as among the perpetrators of the theft. Petitioners have not shown any ill motive on
the part of Calso to implicate them in the offense, unless it was true. In addition, petitioners admitted their participation in the
theft during an investigation conducted by private respondents' lawyer.

We are not convinced by petitioners' allegation that such admission was obtained by means of threat or intimidation as such
allegation is couched in general terms and is unsupported by evidence.

We also reject petitioners' argument that said admission is inadmissible as evidence against them under Section 12 Article
III of the 1987 Constitution. The right to counsel under Section 12 of the Bill of Rights is meant to protect a suspect in a
criminal case under custodial investigation. Custodial investigation is the stage where the police investigation is no longer a
general inquiry into an unsolved crime but has begun to focus on a particular suspect who had been taken into custody by
the police to carry out a process of interrogation that lends itself to elicit incriminating statements. It is when questions are
initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of
action in any significant way. The right to counsel attaches only upon the start of such investigation. 14 Therefore, the
exclusionary rule under paragraph (3) Section 12 of the Bill of Rights applies only to admission made in a
criminal investigation but not to those made in an administrative investigation.

In the case at bar, the admission was made by petitioners during the course of the investigation conducted by private
respondents' counsel to determine whether there is sufficient ground to terminate their employment. Petitioners were not
under custodial investigation as they were not yet accused by the police of committing a crime. The investigation was merely
an administrative investigation conducted by the employer, not a criminal investigation. The questions were propounded by
the employer's lawyer, not by police officers. The fact that the investigation was conducted at the police station did not
necessarily put petitioners under custodial investigation as the venue of the investigation was merely incidental. Hence, the
admissions made by petitioners during such investigation may be used as evidence to justify their dismissal.

Private respondents, however, failed to observe due process in terminating the employment of petitioners. Due process
demands that the employer should furnish the worker whose employment is sought to be terminated a written notice
containing a statement of the cause(s) for termination and afford him ample opportunity to be heard and to defend himself
with the assistance of a representative if he so desires. Specifically, the employer must furnish the worker 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. 15 There is no showing in this case that private respondents furnished
petitioners which such notices. Private respondents, through their counsel, Atty. Reyes, immediately
terminated petitioners' services upon conclusion of the investigation. Private respondents must therefore
indemnify petitioners for failure to observe due process before dismissing them from work.
IN VIEW WHEREOF, the petition is DISMISSED. The assailed decision is hereby AFFIRMED. No costs.

SO ORDERED.

LORNA DISING PUNZAL, G.R. Nos. 170384-85

Petitioner,
Present:

QUISUMBING, J., Chairperson,

CARPIO,
- versus - CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.

Promulgated:
ETSI TECHNOLOGIES, INC., March 9, 2007
WERNER GEISERT, and
CARMELO D. REMUDARO,
Respondents.

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CARPIO MORALES, J.:

Petitioner, Lorna Dising Punzal, had been working for respondent, ETSI
Technologies, Inc. (ETSI), for 12 years prior to the termination of her services
on November 26, 2001 on which date she was holding the position of Department
Secretary.

On October 30, 2001, petitioner sent an electronic mail (e-mail) message to

her officemates announcing the holding of a Halloween party that was to be held in
the office the following day. The e-mail message read verbatim:

Dear ETSI-JMT Colleagues,

 Good day!

As you all know, tomorrow is the day before HALLOWEEN. And

many of our kids will go around TRICK OR TREATING. We will be
dressing them up in costumes of all sorts, from cute to outrageous, from
wild to scary.

What we want to have is a similar activity here in the office. So

we invite you to participate in this effort. You can also dress your kids
up in funny costumes. Also the kids will then go around the office Trick
or Treating. So, we ask you to prepare your Treats, like candies, biscuits,
cookies, etc., (Cash is also welcome for parents like me . . . he he he)

Why are we doing this? Well, we just want the kids to have a
good time. Kung gusto ninyo, mag-costume din kayo.

Alright! See you tomorrow morning, [October 31,

[1]
2001]. (Underscoring supplied)

Petitioners immediate superior, respondent Carmelo Remudaro (Remudaro),

who was one of those to whom the e-mail message was sent, advised petitioner to
first secure the approval of the Senior Vice President, respondent Werner Geisert
(Geisert), for the holding of the party in the office.

Petitioner soon learned that Geisert did not approve of the plan to hold a
party in the office. She thereupon sent also on October 30, 2001 another e-mail
message to her officemates, reading verbatim:

Sorry for the mail that I sent you, unfortunately the SVP of ETSI
Technologies, Inc. did not agree to our idea to bring our children in the
office for the TRICK or TREATING. He was so unfairpara bang palagi
siyang iniisahan sa trabahobakit most of the parents na mag-joined ang
anak ay naka-VL naman. Anyway, solohin na lang niya bukas ang
office.

Anyway, to those parents who would like to bring their Kids in

Megamall there will be Trick or Treating at Mc Donalds Megamall Bldg.
 A at 10:00 AM tomorrow and lets not spoil the fun for our
kids.[2] (Underscoring supplied)

Remudaro and Arnold Z. David (David), the Assistant Vice President of

Human Resources/TQM of ETSI, later informed petitioner, by letter of November
13, 2001, that Geisert got a copy of her e-mail message and that he required her to
explain in writing within 48 hours why she

. . . should not be given disciplinary action for committing Article IV,

No. 5 & 8 Improper conduct or acts of discourtesy or disrespect and
Making malicious statements concerning Company Officer, whereby
such offenses may be subject to suspension to termination depending
upon the gravity of the offense/s as specified in our ETSIs Code of
Conduct and Discipline.[3](Emphasis in the original)

Petitioner replied by letter of November 14, 2001 that she had no malicious
intention in sending the second e-mail message and that she never expected such
kind of words can be called as acts of discourtesy or disrespect. [4]

On November 19, 2001, Geisert and Remudaro conferred with petitioner to

give her a chance to explain her side.[5]

David and Remudaro subsequently sent petitioner a letter on November 26,

2001, finding her explanation not acceptable and terminating her services, effective
immediately, for committing Article IV, No[s]. 5 & 8, Improper conduct or act of
discourtesy or disrespect and making malicious statements concerning company
officer.[6]

On February 11, 2002, petitioner filed before the National Labor Relations
Commission (NLRC) a complaint[7] for illegal dismissal against ETSI, Geisert, and
Remudaro.

By Order of November 26, 2002, the Labor Arbiter dismissed petitioners

complaint, finding that she was legally dismissed for serious misconduct, and that
she was afforded due process.[8]
 On petitioners appeal, the NLRC, by Resolution[9] dated October 27, 2003,
found that while she was indeed guilty of misconduct, the penalty of dismissal was
disproportionate to her infraction.[10] The NLRC thus ordered that petitioner was
entitled to reinstatement which, however, was no longer feasible due to strained
relations. The NLRC thus ordered that petitioner be awarded separation pay
equivalent to one month pay for every year of service, a period of at least six
months to be considered one whole year.[11]

Noting that petitioner was not entirely faultless, the NLRC denied her prayer
for backwages[12] as well as her prayer for exemplary and moral damages and
attorneys fees in the absence of the legal conditions justifying their award.[13]

Both parties filed their respective motions for reconsideration[14] which the
NLRC denied.[15] Both parties thereupon filed their respective petitions for
certiorari[16] with the Court of Appeals.

In the petition of petitioner, docketed as CA-G.R. SP No. 83296, she

questioned the denial of her prayer for backwages.[17] Upon the other hand, in the
petition of respondent ETSI, et al., docketed as CA-G.R. SP No. 83205, they
questioned the finding of illegal dismissal, the grant of separation pay, and the
imputation of liability to Geisert and Remudaro.[18]

In her comment to the petition of ETSI, et al. in CA-G.R. SP No. 83205,

petitioner raised the issue of due process, alleging that her employer did not inform
her of her right to be assisted by counsel during the conference with respondents
Geisert and Remudaro.[19]

By Decision[20] of May 13, 2005, the Court of Appeals, which priorly

consolidated the petitions of both parties, held that petitioners dismissal was in
order:[21]

The gravity of Punzals infraction is borne by the fact that her e-

mail message to the workers of ETSI tended to cast scorn and disrespect
toward a senior vice president of the company.The message
itself resounds of subversion and undermines the authority and
credibility of management.

xxxx

Also, this message was not a mere expression of

dissatisfaction privately made by one person to another, but was
circulated to everyone in the work area. The message was sent close at
the heels of SVP Geiserts disapproval of Punzals plan to hold a
Halloween affair in the office, because the said event would disrupt the
operations and peace and order in the office. Punzal therefore displayed
a tendency to act without managements approval, and even against
managements will, as she invited her co-workers to join a trick or
treating activity at another venue during office hours.

The message also comes across as an encouragement to ignore

SVP Geiserts authority, and portrayed him as unworthy of
respect because of his unpopular personality.

This is in clear violation of Article IV, Section 5 of the companys

Code of Conduct and Discipline, which clearly imposes the penalty of
suspension to dismissal, depending upon the gravity of the offense in
cases where an employee displays improper conduct or acts of
discourtesy or disrespect to fellow employees, visitors, guests, clients, at
any time.

The imposition of the penalty of dismissal is proper, because of

the gravity of Punzals misconduct, as earlier pointed out, and
considering that:

(1) Punzals statements were discourteous and disrespectful not

only to a mere co-employee, but to a high ranking executive
official of the company;

(2) Punzals statements tended to ridicule and undermine the

credibility and authority of SVP Geisert, and even encouraged
disobedience to the said officer;

(3) Punzals message was sent to a great number of employees of

ETSI, which tended to sow dissent and disrespect to
management among a great number of employees of ETSI;
 (4) Punzals message could not have been made in good faith,
because the message itself used language that placed SVP
Geisert in ridicule and portrayed him as an object of scorn,
betraying the senders bad faith.

Given these circumstances, the fact that Punzals infraction

occurred only once should be largely insignificant. The gravity and
publicity of the offense as well as its adverse impact in the workplace is
more than sufficient to place the same in the level of a serious
misconduct.[22] (Underscoring supplied)

Contrary to petitioners contention, the Court of Appeals also found that due
process was observed in her dismissal.[23]

The Court of Appeals thus reinstated the Labor Arbiters Order. Thus it
disposed:

WHEREFORE, premises considered, the petition filed by Lorna

Dising Punzal in CA-G.R. SP No. 83296 is hereby DISMISSED, while
the petition filed by ETSI, Werner Geisert and Carmelo D. Remudaro is
hereby GRANTED. The assailed Resolutions, dated October 27,
2003 and January 28, 2004, of the respondent National Labor Relations
Commission are hereby SET ASIDE. In lieu thereof, the Decision of
Labor Arbiter Joel S. Lustria, dated November 26, 2002, dismissing the
complaint filed by Lorna Dising Punzal is hereby REINSTATED.

SO ORDERED.[24] (Underscoring supplied)

Hence, petitioners present Petition for Review on Certiorari,[25] faulting the

appellate court to have erred

. . . WHEN IT RULED THAT PETITIONERS STATEMENT

WAS DISCOURTEOUS AND DISRESPECTFUL CONSTITUTING
GROSS DISRESPECT AND SERIOUS MISCONDUCT;
 . . . WHEN IT FOUND THAT DUE PROCESS WAS
ACCORDED THE PETITIONER;

. . . WHEN IT FAILED TO AWARD THE PETITIONER HER

RIGHT TO REINSTATEMENT AND BACKWAGES.[26]

Petitioner posits that her second e-mail message was merely an exercise of
her right to freedom of expression without any malice on her part.[27]

On the other hand, ETSI, et al. maintain that petitioners second e-mail
message was tainted with bad faith and constituted a grave violation of the
companys code of discipline.[28]

In Philippines Today, Inc. v. NLRC,[29] this Court, passing on the attitude or

respect that an employee is expected to observe towards an employer, held:

Alegres choice of words and way of expression betray his

allegation that the memorandum was simply an opportunity to open the
eyes of (Petitioner) Belmonte to the work environment in petitioners
newspaper with the end in view of persuading (her) to take a hand at
improving said environment. Apprising his employer (or top-level
management) of his frustrations in his job and differences with his
immediate superior is certainly not done in an abrasive, offensive, and
disrespectful manner. A cordial or, at the very least, civil attitude,
according due deference to ones superiors, is still observed, especially
among high-ranking management officers. The Court takes judicial
notice of the Filipino values of pakikisama and paggalang which are not
only prevalent among members of a family and community but within
organizations as well, including work sites. An employee is expected to
extend due respect to management, the employer being the proverbial
hen that lays the golden egg, so to speak. An aggrieved employee who
wants to unburden himself of his disappointments and frustrations in his
job or relations with his immediate superior would normally approach
said superior directly or otherwise ask some other officer possibly to
mediate and discuss the problem with the end in view of settling their
differences without causing ferocious conflicts. No matter how [much]
the employee dislikes the employer professionally, and even if he is in a
confrontational disposition, he cannot afford to be disrespectful and dare
 to talk with an unguarded tongue and/or with a bileful
pen.[30] (Underscoring supplied)

A scrutiny of petitioners second e-mail message shows that her remarks were
not merely an expression of her opinion about Geiserts decision; they were directed
against Geisert himself, viz: He was so unfair . . . para bang palagi siyang
iniisahan sa trabaho. . . Anyway, solohin na lang niya bukas ang office. (Emphasis
supplied)[31]

As the Court of Appeals noted, petitioner, in her closing statement Anyway,

to those parents who would like to bring their Kids in Megamall there will be Trick
or Treating at Mc Donalds x x x tomorrow and lets not spoil the fun for our
kids[32] even invited her co-workers to join a trick or treating activity at another
venue during office hours[33](10:00 AM), October 31, 2001 being a Wednesday and
there is no showing that it was declared a holiday, encouraging them to ignore
Geiserts authority.

Additionally, petitioner sent the e-mail message in reaction to Geiserts

decision which he had all the right to make. That it has been a tradition in ETSI to
celebrate occasions such as Christmas, birthdays, Halloween, and others [34] does not
remove Geiserts prerogative to approve or disapprove plans to hold such
celebrations in office premises and during company time. It is settled that

x x x it is the prerogative of management to regulate, according to

its discretion and judgment, all aspects of employment. This flows from
the established rule that labor law does not authorize the substitution of
the judgment of the employer in the conduct of its business. Such
management prerogative may be availed of without fear of any liability
so long as it is exercised in good faith for the advancement of the
employers interest and not for the purpose of defeating or circumventing
the rights of employees under special laws or valid agreement and are
not exercised in a malicious, harsh, oppressive, vindictive or wanton
manner or out of malice or spite.[35] (Underscoring supplied)
In the case at bar, the disapproval of the plan to hold the Halloween party
on October 31, 2001 may not be considered to have been actuated by bad faith. As
the Labor Arbiter noted:

It may not be ignored that holding a trick or treat party in the

office premises of respondent ETSI would certainly affect the operations
of the office, since children will be freely roaming around the office
premises, things may get misplaced and the noise in the office will
simply be too hard to ignore. Contrary to complainants position, it is
immaterial if the parents of the children who will participate in the trick
or treat will be on vacation leave, since it is the work of the employees
who will not be on leave and who will be working on that day which will
be disrupted, possibly resulting in the disruption of the operations of the
company.[36] (Underscoring supplied)

Given the reasonableness of Geiserts decision that provoked petitioner to

send the second e-mail message, the observations of the Court of Appeals that the
message x x x resounds of subversion and undermines the authority and credibility
of management[37] and that petitioner displayed a tendency to act without
managements approval, and even against managements will are well taken.[38]

Moreover, in circulating the second e-mail message, petitioner violated

Articles III (8) and IV (5) of ETSIs Code of Conduct on making false or malicious
statements concerning the Company, its officers and employees or its products and
services[39] and improper conduct or acts of discourtesy or disrespect to fellow
employees, visitors, guests, clients, at any time.[40]

Petitioner invokes Samson v. National Labor Relations

Commission[41] where this Court held that the dismissal of the therein petitioner
was too harsh a penalty for uttering Si EDT [Epitacio D. Titong, the General
Manager and President of the employer], bullshit yan, sabihin mo kay EDT
yan and sabihin mo kay EDT, bullshit yan, while making the dirty finger gesture,
and warning that the forthcoming national sales conference of the company would
be a very bloody one.
 Petitioners reliance on Samson is misplaced. First, in that case, this Court
found that the misconduct committed was not related with the employees work as
the offensive remarks were verbally made during an informal Christmas gathering
of the employees, an occasion where tongues are more often than not loosened by
liquor or other alcoholic beverages[42] and it is to be expected x x x that employees
freely express their grievances and gripes against their employers.[43]

In petitioners case, her assailed conduct was related to her work. It reflects
an unwillingness to comply with reasonable management directives.

While in Samson, Samson was held to be merely expressing his

dissatisfaction over a management decision,[44] in this case, as earlier shown,
petitioners offensive remarks were directed against Geisert.

Additionally, in Samson, this Court found that unlike in Autobus Workers

Union (AWU) v. NLRC[45] where dismissal was held to be an appropriate penalty
for uttering insulting remarks to the supervisor,[46] Samson uttered the insulting
words against EDT in the latters absence.[47] In the case at bar, while petitioner did
not address her e-mail message to Geisert, she circulated it knowing or at least,
with reason to know that it would reach him. As ETSI notes, [t]hat [petitioner]
circulated this e-mail message with the knowledge that it would reach the eyes of
management may be reasonably concluded given that the first e-mail message
reached her immediate supervisors attention.[48]

Finally, in Samson, this Court found that the lack of urgency on the part of
the respondent company in taking any disciplinary action against [the employee]
negates its charge that the latters misbehavior constituted serious misconduct. [49] In
the case at bar, the management acted 14 days after petitioner circulated the quoted
e-mail message.[50]

Petitioner asks that her 12 years of service to ETSI during which, so she
claims, she committed no other offense be taken as a mitigating
circumstance.[51] This Court has held, however, that the longer an employee stays
in the service of the company, the greater is his responsibility for knowledge and
compliance with the norms of conduct and the code of discipline in the
company.[52]
 In fine, petitioner, having been dismissed for just cause, is neither entitled to
reinstatement nor to backwages.
Petitioners contention that she was denied due process is well-taken
however, as the records do not show that she was informed of her right to be
represented by counsel during the conference with Geisert and Remudaro.

The protestations of ETSI, et al. that the right to be informed of the right to
counsel does not apply to investigations before administrative bodies and that law
and jurisprudence merely give the employee the option to secure the services of
counsel in a hearing or conference[53] fall in light of the clear provision of Article
277 (b) of the Labor Code that

the employer xxx shall afford [the worker whose employment is

sought to be terminated] ample opportunity to be heard and to defend
himself with the assistance of his representatives if he so desires in
accordance with company rules and regulations pursuant to guidelines
set by the Department of Labor and Employment,

and this Courts explicit pronouncement that [a]mple opportunity connotes every
kind of assistance that management must accord the employee to enable him to
prepare adequately for his defense including legal representation.[54]

Following Agabon, et al. v. National Labor Relations Commission,[55] the

violation of petitioners statutory due process right entitles her to an award of
nominal damage, which this Court fixes at P30,000.[56]

WHEREFORE, the petition is in part GRANTED. The questioned

decision is AFFIRMED with the MODIFICATION that respondent ETSI
Technologies, Inc. is ordered to pay petitioner, Lorna Punzal, nominal damages in
the amount of P30,000.

SO ORDERED.

G.R. No. L-25018 May 26, 1969

ARSENIO PASCUAL, JR., petitioner-appellee,

vs.
BOARD OF MEDICAL EXAMINERS, respondent-appellant, SALVADOR GATBONTON and ENRIQUETA
GATBONTON, intervenors-appellants.

Conrado B. Enriquez for petitioner-appellee.

Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Antonio A. Torres and Solicitor Pedro A. Ramirez
for respondent-appellant.
Bausa, Ampil and Suarez for intervenors-appellants.

FERNANDO, J.:

The broad, all-embracing sweep of the self-incrimination clause,1 whenever appropriately invoked, has been accorded due
recognition by this Court ever since the adoption of the Constitution.2 Bermudez v. Castillo,3decided in 1937, was quite
categorical. As we there stated: "This Court is of the opinion that in order that the constitutional provision under
consideration may prove to be a real protection and not a dead letter, it must be given a liberal and broad interpretation
favorable to the person invoking it." As phrased by Justice Laurel in his concurring opinion: "The provision, as doubtless it
was designed, would be construed with the utmost liberality in favor of the right of the individual intended to be served." 4

Even more relevant, considering the precise point at issue, is the recent case of Cabal v. Kapunan,5where it was held that a
respondent in an administrative proceeding under the Anti-Graft Law 6 cannot be required to take the witness stand at the
instance of the complainant. So it must be in this case, where petitioner was sustained by the lower court in his plea that he
could not be compelled to be the first witness of the complainants, he being the party proceeded against in an administrative
charge for malpractice. That was a correct decision; we affirm it on appeal.

Arsenio Pascual, Jr., petitioner-appellee, filed on February 1, 1965 with the Court of First Instance of Manila an action for
prohibition with prayer for preliminary injunction against the Board of Medical Examiners, now respondent-appellant. It was
alleged therein that at the initial hearing of an administrative case 7 for alleged immorality, counsel for complainants
announced that he would present as his first witness herein petitioner-appellee, who was the respondent in such malpractice
charge. Thereupon, petitioner-appellee, through counsel, made of record his objection, relying on the constitutional right to
be exempt from being a witness against himself. Respondent-appellant, the Board of Examiners, took note of such a plea, at
the same time stating that at the next scheduled hearing, on February 12, 1965, petitioner-appellee would be called upon to
testify as such witness, unless in the meantime he could secure a restraining order from a competent authority.

Petitioner-appellee then alleged that in thus ruling to compel him to take the witness stand, the Board of Examiners was
guilty, at the very least, of grave abuse of discretion for failure to respect the constitutional right against self-incrimination,
the administrative proceeding against him, which could result in forfeiture or loss of a privilege, being quasi-criminal in
character. With his assertion that he was entitled to the relief demanded consisting of perpetually restraining the respondent
Board from compelling him to testify as witness for his adversary and his readiness or his willingness to put a bond, he
prayed for a writ of preliminary injunction and after a hearing or trial, for a writ of prohibition.

On February 9, 1965, the lower court ordered that a writ of preliminary injunction issue against the respondent Board
commanding it to refrain from hearing or further proceeding with such an administrative case, to await the judicial disposition
of the matter upon petitioner-appellee posting a bond in the amount of P500.00.

The answer of respondent Board, while admitting the facts stressed that it could call petitioner-appellee to the witness stand
and interrogate him, the right against self-incrimination being available only when a question calling for an incriminating
answer is asked of a witness. It further elaborated the matter in the affirmative defenses interposed, stating that petitioner-
appellee's remedy is to object once he is in the witness stand, for respondent "a plain, speedy and adequate remedy in the
ordinary course of law," precluding the issuance of the relief sought. Respondent Board, therefore, denied that it acted with
grave abuse of discretion.

There was a motion for intervention by Salvador Gatbonton and Enriqueta Gatbonton, the complainants in the administrative
case for malpractice against petitioner-appellee, asking that they be allowed to file an answer as intervenors. Such a motion
was granted and an answer in intervention was duly filed by them on March 23, 1965 sustaining the power of respondent
Board, which for them is limited to compelling the witness to take the stand, to be distinguished, in their opinion, from the
power to compel a witness to incriminate himself. They likewise alleged that the right against self-incrimination cannot be
availed of in an administrative hearing.

A decision was rendered by the lower court on August 2, 1965, finding the claim of petitioner-appellee to be well-founded
and prohibiting respondent Board "from compelling the petitioner to act and testify as a witness for the complainant in said
investigation without his consent and against himself." Hence this appeal both by respondent Board and intervenors, the
Gatbontons. As noted at the outset, we find for the petitioner-appellee.

1. We affirm the lower court decision on appeal as it does manifest fealty to the principle announced by us inCabal v.
Kapunan. 8 In that proceeding for certiorari and prohibition to annul an order of Judge Kapunan, it appeared that an
administrative charge for unexplained wealth having been filed against petitioner under the Anti-Graft Act,9the complainant
requested the investigating committee that petitioner be ordered to take the witness stand, which request was granted. Upon
petitioner's refusal to be sworn as such witness, a charge for contempt was filed against him in the sala of respondent
Judge. He filed a motion to quash and upon its denial, he initiated this proceeding. We found for the petitioner in accordance
with the well-settled principle that "the accused in a criminal case may refuse, not only to answer incriminatory questions,
but, also, to take the witness stand."

It was noted in the opinion penned by the present Chief Justice that while the matter referred to an a administrative charge
of unexplained wealth, with the Anti-Graft Act authorizing the forfeiture of whatever property a public officer or employee
may acquire, manifestly out proportion to his salary and his other lawful income, there is clearly the imposition of a penalty.
The proceeding for forfeiture while administrative in character thus possesses a criminal or penal aspect. The case before
us is not dissimilar; petitioner would be similarly disadvantaged. He could suffer not the forfeiture of property but the
revocation of his license as a medical practitioner, for some an even greater deprivation.

To the argument that Cabal v. Kapunan could thus distinguished, it suffices to refer to an American Supreme Court opinion
highly persuasive in character. 10 In the language of Justice Douglas: "We conclude ... that the Self-Incrimination Clause of
the Fifth Amendment has been absorbed in the Fourteenth, that it extends its protection to lawyers as well as to other
individuals, and that it should not be watered down by imposing the dishonor of disbarment and the deprivation of a
livelihood as a price for asserting it." We reiterate that such a principle is equally applicable to a proceeding that could
possibly result in the loss of the privilege to practice the medical profession.

2. The appeal apparently proceeds on the mistaken assumption by respondent Board and intervenors-appellants that the
constitutional guarantee against self-incrimination should be limited to allowing a witness to object to questions the answers
to which could lead to a penal liability being subsequently incurred. It is true that one aspect of such a right, to follow the
language of another American decision, 11 is the protection against "any disclosures which the witness may reasonably
apprehend could be used in a criminal prosecution or which could lead to other evidence that might be so used." If that were
all there is then it becomes diluted.law phi 1.et

The constitutional guarantee protects as well the right to silence. As far back as 1905, we had occasion to declare: "The
accused has a perfect right to remain silent and his silence cannot be used as a presumption of his guilt." 12 Only last year,
in Chavez v. Court of Appeals, 13 speaking through Justice Sanchez, we reaffirmed the doctrine anew that it is the right of a
defendant "to forego testimony, to remain silent, unless he chooses to take the witness stand with undiluted, unfettered
exercise of his own free genuine will."

Why it should be thus is not difficult to discern. The constitutional guarantee, along with other rights granted an accused,
stands for a belief that while crime should not go unpunished and that the truth must be revealed, such desirable objectives
should not be accomplished according to means or methods offensive to the high sense of respect accorded the human
personality. More and more in line with the democratic creed, the deference accorded an individual even those suspected of
the most heinous crimes is given due weight. To quote from Chief Justice Warren, "the constitutional foundation underlying
the privilege is the respect a government ... must accord to the dignity and integrity of its citizens." 14

It is likewise of interest to note that while earlier decisions stressed the principle of humanity on which this right is predicated,
precluding as it does all resort to force or compulsion, whether physical or mental, current judicial opinion places equal
emphasis on its identification with the right to privacy. Thus according to Justice Douglas: "The Fifth Amendment in its Self-
Incrimination clause enables the citizen to create a zone of privacy which government may not force to surrender to his
detriment." 15 So also with the observation of the late Judge Frank who spoke of "a right to a private enclave where he may
lead a private life. That right is the hallmark of our democracy." 16 In the light of the above, it could thus clearly appear that no
possible objection could be legitimately raised against the correctness of the decision now on appeal. We hold that in an
administrative hearing against a medical practitioner for alleged malpractice, respondent Board of Medical Examiners
cannot, consistently with the self-incrimination clause, compel the person proceeded against to take the witness stand
without his consent.

WHEREFORE, the decision of the lower court of August 2, 1965 is affirmed. Without pronouncement as to costs.

G.R. No. L-19052 December 29, 1962

MANUEL F. CABAL, petitioner,

vs.
HON. RUPERTO KAPUNAN, JR., and THE CITY FISCAL OF MANILA, respondents.

Francisco Carreon for petitioner.

Assistant City Fiscal Manuel T. Reyes for respondent City of Manila.

CONCEPCION, J.:

This is an original petition for certiorari and prohibition with preliminary injunction, to restrain the Hon. Ruperto Kapunan, Jr.,
as Judge of the Court of First Instance of Manila, from further proceeding in Criminal Case No. 60111 of said court, and to
set aside an order of said respondent, as well as the whole proceedings in said criminal case. .

On or about August 1961, Col. Jose C. Maristela of the Philippine Army filed with the Secretary of Nation Defense a letter-
complaint charging petitioner Manuel Cabal, then Chief of Staff of the Armed Forces of the Philippines, with "graft, corrupt
practices, unexplained wealth, conduct unbecoming of an officer and gentleman dictatorial tendencies, giving false
statements of his as sets and liabilities in 1958 and other equally reprehensible acts". On September 6, 1961, the President
of the Philippines created a committee of five (5) members, consisting of former Justice Marceliana R. Montemayor, as
Chairman, former Justices Buenaventura Ocampo and Sotero Cabahug, and Generals Basilio J. Valdez and Guillermo B.
Francisco, to investigate the charge of unexplained wealth contained in said letter-complaint and submit its report and
recommendations as soon as possible. At the beginning of the investigation, on September 15, 1961, the Committee, upon
request of complainant Col. Maristela, or considered petitioner herein to take the witness stand and be sworn to as witness
for Maristela, in support of his aforementioned charge of unexplained wealth. Thereupon, petitioner objected, personally and
through counsel, to said request of Col. Maristela and to the aforementioned order of the Committee, invoking his
constitutional right against self-incrimination. The Committee insisted that petitioner take the witness stand and be sworn to,
subject to his right to refuse to answer such questions as may be incriminatory. This notwithstanding, petitioner respectfully
refused to be sworn to as a witness to take the witness stand. Hence, in a communication dated September 18, 1961, the
Committee referred the matter to respondent City Fiscal of Manila, for such action as he may deem proper. On September
28, 1961, the City Fiscal filed with the Court of First Instance of Manila a "charge" reading as follows:

The undersigned hereby charges Manuel F. Cabal with contempt under section 580 of the Revised Administrative
Code in relation to sections I and 7, Rule 64 of the Rules of Court, committed as follows:

That on or about September 15, 1961, in the investigation conducted at the U.P. Little Theater:, Padre
Faura, Manila, by the Presidential Committee, which was created by the President of the Republic of the
Philippines in accordance with law to investigate the charges of alleged acquisition by respondent of
unexplained wealth and composed of Justice Marceliano Montemayor, as Chairman, and Justices
Buenaventura Ocampo and Sotero Cabahug and Generals Basilio Valdez and Guillermo Francisco, as
members, with the power, among others, to compel the attendance of witnesses and take their testimony
under oath, respondent who was personally present at the time before the Committee in compliance with
a subpoena duly issued to him, did then and there willfully, unlawfully, and contumaciously, without any
justifiable cause or reason refusal and fail and still refuses and fails to obey the lawful order of the
Committee to take the witness stand, be sworn and testify as witness in said investigation, in utter
disregard of the lawful authority of the Committee and thereby obstructing and degrading the proceedings
before said body.

Wherefore, it is respectfully prayed that respondent be summarily adjudged guilty of contempt of the Presidential
Committee and accordingly disciplined as in contempt of court imprisonment until such time as he shall obey the
subject order of said committee.
This charge, docketed as Criminal Case No. 60111 of said court, was assigned to Branch XVIII thereof, presided over by
respondent Judge. On October 2, 1961, the latter issued an order requiring petitioner to show cause and/or answer the
charge filed against him within ten (10) days. Soon thereafter, or on October 4, 1961, petitioner filed with respondent Judge
a motion to quash the charge and/or order to show cause, upon the ground: (1) that the City Fiscal has neither authority nor
personality to file said char and the same is null and void, for, if criminal, the charge has been filed without a preliminary
investigation, and, civil, the City Fiscal may not file it, his authority in respect of civil cases being limited to representing the
City of Manila; (2) that the facts charged constitute no offense for section 580 of the Revised Administrative Code, upon
which the charge is based, violates due process, in that it is vague and uncertain as regards the offense therein defined and
the fine imposable therefor and that it fail to specify whether said offense shall be treated also contempt of an inferior court
or of a superior court (3) that more than one offense is charged, for the contempt imputed to petitioner is sought to be
punished as contempt of an inferior court, as contempt of a superior court an as contempt under section 7 of Rule 64 of the
Rules Court; (4) that the Committee had no power to order an require petitioner to take the witness stand and be sworn to,
upon the request of Col. Maristela, as witness for the latter, inasmuch as said order violates petitioner's constitutional right
against self-incrimination.

By resolution dated October 14, 1961. respondent Judge denied said motion to quash. Thereupon, or on October 20, 1961,
petitioner began the present action for the purpose adverted to above, alleging that, unless restrained by this court,
respondent Judge may summarily punish him for contempt, and that such action would not be appealable.

In their answer, respondents herein allege, inter alia, that the investigation being conducted by the Committee above
referred to is administrative, not criminal, in nature; that the legal provision relied upon by petitioner in relation to preliminary
investigations (Section '08-C, Republic Act No. 409, as amended by Republic Act No. 1201) is inapplicable to contempt
proceedings; that, under section 580 of the Revised Administrative Code. contempt against an administrative officer is to be
dealt with as contempt of a superior court; that petitioner herein is charged with only one offense; and that, tinder the
constitutional guarantee against self-incrimination, petitioner herein may refuse, not to take the witness stand, but to answer
incriminatory questions.

At the outset, it is not disputed that the accused in a criminal case may refuse, not only to answer incriminatory questions,
but, also, to take the witness stand (3 Wharton's Criminal Evidence, pp. 1959-1960; 98 C.J.S., p. 264). Hence, the issue
before us boils down to whether or not the proceedings before the aforementioned Committee is civil or criminal in
character.

In this connection, it should be noted that, although said Committee was created to investigate the administrative charge of
unexplained wealth, there seems to be no question that Col. Maristela does not seek the removal of petitioner herein as
Chief of Staff of the Armed Forces of the Philippines. As a matter of fact he no longer holds such office. It seems, likewise
conceded that the purpose of the charge against petitioner is to apply the provisions of Republic Act No. 1379, as amended,
otherwise known as the Anti-Graft Law, which authorizes the forfeiture to the State of property of a public officer or
employee which is manifestly out of proportion to his salary as such public officer or employee and his other lawful income
and the income from legitimately acquired property. Such for forfeiture has been held, however, to partake of the nature of a
penalty.

In a strict signification, a forfeiture is a divestiture property without compensation, in consequence of a default an

offense, and the term is used in such a sense in this article. A forfeiture, as thus defined, is imposed by way
of punishment not by the mere convention of the parties, but by the lawmaking power, to insure a prescribed
course of conduct. It is a method deemed necessary by the legislature to restrain thecommission of an offense and
to aid in the prevention of such a offense. The effect of such a forfeiture is to transfer the title to the specific thing
from the owner to the sovereign power (23 Am. Jur. 599) (Emphasis ours.)

In Black's Law Dictionary a "forfeiture" is defined to be "the incurring of a liability to pay a definite sum of money as
the consequence of violating the provisions of some statute or refusal to comply with some requirement of law." It
may be said to be a penalty imposed for misconduct or breach of duty. (Com. vs. French, 114 S.W. 255.)

As a consequence, proceedings for forfeiture of proper are deemed criminal or penal, and, hence, the exemption of
defendants in criminal case from the obligation to be witnesses against themselves are applicable thereto.

Generally speaking, informations for the forfeiture of goods that seek no judgment of fine or imprisonment against
any person are deemed to be civil proceedings in rem. Such proceedings are criminal in nature to the extent that
where the person using the res illegally is the owner or rightful possessor of it, the forfeiture proceeding is in the
nature of a punishment. They have been held to be so far in the nature criminal proceedings that a general verdict
on several count in an information is upheld if one count is good.According to the authorities such proceedings,
where the owner of the property appears, are so far considered as quasi-criminal proceeding as to relieve the
 owner from being a witness against himself and to prevent the compulsory production of his books and papers. ...
(23 Am. Jur. 612; emphasis ours.)

Although the contrary view formerly obtained, the late decisions are to the effect that suits for forfeitures incurred
by the commission of offenses against the law are so far of quasi-criminal nature as to be within the reason of
criminal proceedings for all purposes of ... that portion of the Fifth Amendment which declares that no person shall
be compelled in any criminal case to be a witness against himself. .... It has frequently been held upon
constitutional grounds under the various State Constitution, that a witness or party called as witness cannot be
made to testify against himself as to matters which would subject his property to forfeiture. At early common law no
person could be compelled to testify against himself or to answer any question which would have had a tendency
to expose his property to a forfeiture or to form a link in a chain of evidence for that purpose, as well as to
incriminate him. Under this common-law doctrine of protection against compulsory disclosures which would tend to
subject the witness to forfeiture, such protection was claimed and availed of in some early American cases without
placing the basis of the protection upon constitutional grounds. (23 Am. Jur., 616; emphasis ours.)

Proceedings for forfeitures are generally considered to be civil and in the nature of proceedings in rem. The statute
providing that no judgment or other proceedings in civil cases shall be arrested or reversed for any defect or want
of form is applicable to them. In some aspects, however, suits for penalties and forfeitures are of quasi-criminal
nature and within the reason of criminal proceedings for all the purposes of ... that portion of the Fifth Amendment
which declares, that no person shall be compelled in any criminal case to be a witness against himself. The
proceeding is one against the owner, as well as against the goods; for it is his breach of the laws which has to be
proved to establish the forfeiture and his property is sought to be forfeited. (15 Am. Jur., Sec. 104, p. 368;
emphasis ours.) lawphil.net

The rule protecting a person from being compelled to furnish evidence which would incriminate him existsnot
only when he is liable criminally to prosecution and punishment, but also when his answer would tend to expose
him to a ... forfeiture .... (58 Am. Jur., See. 43, p. 48; emphasis ours.)

As already observed, the various constitutions provide that no person shall be compelled in any criminal case to be
a witness against himself. This prohibition against compelling a person to take the stand as a witness against
himself applied only to criminal, quasi-criminal, and penal proceedings, including a proceeding civil in form for
forfeiture of property by reason of the commission of an offense, but not a proceeding in which the penalty
recoverable is civil or remedial in nature, .... (58 Am. Jur., Sec. 44, p. 49: emphasis ours.)

The privilege of a witness not to incriminate himself is not infringed by merely asking the witness a question which
he refuses to answer. The privilege is simply an option of refusal, and not a prohibition of inquiry. A question is not
improper merely because the answer may tend to incriminate but, where a witness exercises his constitutional
right not to answer, a question by counsel as to whether the reason for refusing to answer is because the answer
may tend to incriminate the witness is improper.

The possibility that the examination of the witness will be pursued to the extent of requiring self-incrimination will
not justify the refusal to answer questions. However, where the position of the witness is virtually that of an
accused on trial, it would appear that he may invoke the privilege in support of a blanket refusal to answer any and
all questions. (C.J.S., p. 252; emphasis ours.)

A person may not be compelled to testify in an action against him for a penalty or to answer any question as a
witness which would subject him to a penalty or forfeiture, where the penalty or forfeiture is imposed as a
vindication of the public justice of the state.

In general, both at common law and under a constitution provision against compulsory self-incrimination, a person
may not be compelled to answer any question as a witness which would subject him to a penalty orforfeiture,
or testify in action against him for a penalty.

The privilege applies where the penalty or forfeiture recoverable, or is imposed in vindication of the public justice
the state as a statutory fine or penalty, or a fine or penalty for violation of a municipal ordinance, even though the
action or proceeding for its enforcement is not brought in a criminal court but is prosecuted through the modes of
procedure applicable to ordinary civil remedy. (98 C. J. S., pp. 275-6.)

Thus, in Boyd vs. U.S. (116 U.S. 616, 29 L. ed. 746), it was held that the information, in a proceeding to declaration a
forfeiture of certain property because of the evasion of a certain revenue law, "though technically a civil proceeding is in
substance and effect a criminal one", and that suits for penalties and forfeitures are within the reason criminal proceedings
for the purposes of that portion the Fifth Amendment of the Constitution of the U.S. which declares that no person shall be
compelled in a criminal case to be a witness against himself. Similarly, a proceeding for the removal of an officer was held,
in Thurston vs. Clark (107 Cal. 285, 40 pp. 435, 437), to be in substance criminal, for said portion of the Fifth Amendment
applies "to all cases in which the action prosecution is not to establish, recover or redress private and civil rights, but to try
and punish persons charged with the commission of public offenses" and "a criminal case is a action, suit or cause instituted
to punish an infraction the criminal laws, and, with this object in view, it matters not in what form a statute may clothe it; it is
still a criminal case ...". This view was, in effect confirmed in Lees vs. U.S. (37 L. ed. 1150-1151). Hence, the Lawyer
Reports Annotated (Vol. 29, p. 8), after an extensive examination of pertinent cases, concludes that said constitutional
provision applies whenever the proceeding is not "purely remedial", or intended "as a redress for a privategrievance", but
primarily to punish "a violation of duty or a public wrong and to deter others from offending in likewise manner. ...".

We are unmindful of the doctrine laid down in Almeda vs. Perez, L-18428 (August 30, 1962) in which the theory that, after
the filing of respondents' answer to a petition for forfeiture under Republic Act No. 1379, said petition may not be amended
as to substance pursuant to our rules of criminal procedure, was rejected by this Court upon the ground that said forfeiture
proceeding in civil in nature. This doctrine refers, however, to the purelyprocedural aspect of said proceeding, and has no
bearing the substantial rights of the respondents therein, particularly their constitutional right against self-incrimination.

WHEREFORE, the writ prayed for is granted and respondent Judge hereby enjoined permanently from proceeding further in
Criminal Case No. 60111 of the Court of First Instance of Manila. It is so ordered.

G.R. No. 113271 October 16, 1997

WATEROUS DRUG CORPORATION and MS. EMMA CO, petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION and ANTONIA MELODIA
CATOLICO, respondents.

DAVIDE, JR., J.:

Nor is he a true Servant [who] buys dear to share in the Profit with the Seller. 1

This petition for certiorari under Rule 65 of the Rules of Court seeks to declare private respondent
Antonia Melodia Catolico (hereafter Catolico) not a "true Servant," thereby assailing the 30
September 1993 decision 2 and December 1993 Resolution 3 of the National Labor Relations
Commission (NLRC) in NLRC-NCR CA No. 005160-93, which sustained the reinstatement and monetary
awards in favor of private respondent 4 and denied the petitioners' motion for reconsideration. 5

The facts are as follows:

Catolico was hired as a pharmacist by petitioner Waterous Drug Corporation (hereafter

WATEROUS) on 15 August 1988.

On 31 July 1989, Catolico received a memorandum 6 from WATEROUS Vice President-General

Manager Emma R. Co warning her not to dispense medicine to employees chargeable to the latter's
accounts because the same was a prohibited practice. On the same date, Co issued another
memorandum 7 to Catolico warning her not to negotiate with suppliers of medicine without consulting the
Purchasing Department, as this would impair the company's control of purchases and, besides she was
not authorized to deal directly with the suppliers.
As regards the first memorandum, Catolico did not deny her responsibility but explained that her act
was "due to negligence," since fellow employee Irene Soliven "obtained the medicines in bad faith
and through misrepresentation when she claimed that she was given a charge slip by the Admitting
Dept." Catolico then asked the company to look into the fraudulent activities of Soliven. 8

In a memorandum 9 dated 21 November 1989, WATEROUS Supervisor Luzviminda E. Bautro warned

Catolico against the "rush delivery of medicines without the proper documents."

On 29 January 1990, WATEROUS Control Clerk Eugenio Valdez informed Co that he noticed an
irregularity involving Catolico and Yung Shin Pharmaceuticals, Inc. (hereafter YSP), which he
described as follows:

. . . A case in point is medicine purchased under our Purchase Order (P.O.) No. 19045 with
YSP Sales Invoice No. 266 representing purchase of ten (10) bottles of Voren tablets at
P384.00 per unit. Previews P.O.s issued to YSP, Inc. showed that the price per bottle is
P320.00 while P.O. No. 19045 is priced at P384.00 or an over price of P64.00 per bottle (or
total of P640.00). WDRC paid the amount of P3,840.00 thru MBTC Check No. 222832 dated
December 15, 1988. Verification was made to YSP, Inc. to determine the discrepancy and it
was found that the cost per bottle was indeed overpriced. YSP, Inc. Accounting Department
(Ms. Estelita Reyes) confirmed that the difference represents refund of jack-up price of ten
bottles of Voren tablets per sales invoice no. 266 as per their check voucher no. 629552
(shown to the undersigned), which was paid to Ms. Catolico through China Bank check no.
892068 dated November 9, 1989 . . . .

The undersigned talked to Ms. Catolico regarding the check but she denied having received
it and that she is unaware of the overprice. However, upon conversation with Ms. Saldana,
EDRC Espana Pharmacy Clerk, she confirmed that the check amounting to P640.00 was
actually received by Ms. Catolico. As a matter of fact, Ms. Catolico even asked Ms. Saldana
if she opened the envelope containing the check but Ms. Saldana answered her "talagang
ganyan, bukas." It appears that the amount in question (P640.00) had been pocketed by Ms.
Catolico. 10

Forthwith, in her memorandum 11 dated 37 January 1990, Co asked Catolico to explain, within twenty-
four hours, her side of the reported irregularity. Catolico asked for additional time to give her
explanation, 12 and she was granted a 48-hour extension from 1 to 3 February 1990. However, on 2
February 1990, she was informed that effective 6 February 1990 to 7 March 1990, she would be placed
on preventive suspension to protect the interests of the company. 13

In a letter dated 2 February 1990, Catolico requested access to the file containing Sales Invoice No.
266 for her to be able to make a satisfactory explanation. In said letter she protested Saldaa's
invasion of her privacy when Saldaa opened an envelope addressed to Catolico. 14

In a letter 15 to Co dated 10 February 1990, Catolico, through her counsel, explained that the check she
received from YSP was a Christmas gift and not a "refund of overprice." She also averred that the
preventive suspension was ill-motivated, as it sprang from an earlier incident between her and Co's
secretary, Irene Soliven.

On 5 March 1990, WATEROUS Supervisor Luzviminda Bautro, issued a memorandum 16 notifying

Catolico of her termination; thus:

We received your letter of explanation and your lawyer's letter dated Feb. 2, 1990 and Feb.
10, 1990 respectively regarding our imposition of preventive suspension on you for acts of
 dishonesty. However, said letters failed to rebut the evidences [sic] in our possession which
clearly shows that as a Pharmacist stationed at Espana Branch, you actually made Purchase
Orders at YSP Phils., Inc. for 10 bottles of Voren tablets at P384.00/bottle with previous price
of P320.00/bottle only. A check which you received in the amount of P640.00 actually
represents the refund of over price of said medicines and this was confirmed by Ms. Estelita
Reyes, YSP Phils., Inc. Accounting Department.

Your actuation constitutes an act of dishonesty detrimental to the interest of the company.
Accordingly, you are hereby terminated effective March 8, 1990.

On 5 May 1990, Catolico filed before the Office of the Labor Arbiter a complaint for unfair labor
practice, illegal dismissal, and illegal suspension. 17

In his decision 18 of 10 May 1993, Labor Arbiter Alex Arcadio Lopez found no proof of unfair labor practice
against petitioners. Nevertheless, he decided in favor of Catolico because petitioners failed to "prove what
[they] alleged as complainant's dishonesty," and to show that any investigation was conducted. Hence,
the dismissal was without just cause and due process. He thus declared the dismissal and suspension
illegal but disallowed reinstatement, as it would not be to the best interest of the parties. Accordingly, he
awarded separation pay to Catolico computed at one-half month's pay for every year of service; back
wages for one year; and the additional sum of P2,000.00 for illegal suspension "representing 30 days
work." Arbiter Lopez computed the award in favor of Catolico as follows:

30 days Preventive Suspension P2,000.00

Backwages 26,858.50
1/12 of P26,858.50 2,238.21
Separation pay (3 years) 4,305.15

TOTAL AWARD P35,401.86

Petitioners seasonably appealed from the decision and urged the NLRC to set it aside because the
Labor Arbiter erred in finding that Catolico was denied due process and that there was no just cause
to terminate her services.

In its decision 19 of 30 September 1993, the NLRC affirmed the findings of the Labor Arbiter on the
ground that petitioners were not able to prove a just cause for Catolico's dismissal from her employment.
It found that petitioner's evidence consisted only of the check of P640.00 drawn by YSP in favor of
complainant, which her co-employee saw when the latter opened the envelope. But, it declared that the
check was inadmissible in evidence pursuant to Sections 2 and 3(1 and 2) of Article III of the
Constitution. 20 It concluded:

With the smoking gun evidence of respondents being rendered inadmissible, by virtue of the
constitutional right invoked by complainants, respondents' case falls apart as it is bereft of
evidence which cannot be used as a legal basis for complainant's dismissal.

The NLRC then dismissed the appeal for lack of merit, but modified the dispositive portion of the
appealed decision by deleting the award for illegal suspension as the same was already included in
the computation of the aggregate of the awards in the amount of P35,401.86.

Their motion for reconsideration having been denied, petitioners filed this special civil action
for certiorari, which is anchored on the following grounds:
 I. Public respondent committed grave abuse of discretion in its findings of
facts.

II. Due process was duly accorded to private respondent.

III. Public respondent gravely erred in applying Section 3, Article III of the
1987 Constitution.

As to the first and second grounds, petitioners insist that Catolico had been receiving "commissions"
from YSP, or probably from other suppliers, and that the check issued to her on 9 November 1989
was not the first or the last. They also maintained that Catolico occupied a confidential position and
that Catolico's receipt of YSP's check, aggravated by her "propensity to violate company rules,"
constituted breach of confidence. And contrary to the findings of NLRC, Catolico was given ample
opportunity to explain her side of the controversy.

Anent the third ground, petitioners submit that, in light of the decision in the People v. Marti, 21 the
constitutional protection against unreasonable searches and seizures refers to the immunity of one's
person from interference by government and cannot be extended to acts committed by private individuals
so as to bring it within the ambit of alleged unlawful intrusion by the government.

In its Manifestation in Lieu of Comment, the Office of the Solicitor General (OSG) disagreed with the
NLRC's decision, as it was of the persuasion that (a) the conclusions reached by public respondent
are inconsistent with its findings of fact; and (b) the incident involving the opening of envelope
addressed to private respondent does not warrant the application of the constitutional provisions. It
observed that Catolico was given "several opportunities" to explain her side of the check
controversy, and concluded that the opportunities granted her and her subsequent explanation
"satisfy the requirements of just cause and due process." The OSG was also convinced that
Catolico's dismissal was based on just cause and that Catolico's admission of the existence of the
check, as well as her "lame excuse" that it was a Christmas gift from YSP, constituted substantial
evidence of dishonesty. Finally, the OSG echoed petitioners' argument that there was no violation of
the right of privacy of communication in this case, 22 adding that petitioner WATEROUS was justified in
opening an envelope from one of its regular suppliers as it could assume that the letter was a business
communication in which it had an interest.

In its Comment which we required to be filed in view of the adverse stand of the OSG, the NLRC
contends that petitioners miserably failed to prove their claim that it committed grave abuse of
discretion in its findings of fact. It then prays that we dismiss this petition.

In her Comment, Catolico asserts that petitioners' evidence is too "flimsy" to justify her dismissal.
The check in issue was given to her, and she had no duty to turn it over to her employer. Company
rules do not prohibit an employee from accepting gifts from clients, and there is no indication in the
contentious check that it was meant as a refund for overpriced medicines. Besides, the check was
discovered in violation of the constitutional provision on the right to privacy and communication;
hence, as correctly held by the NLRC, it was inadmissible in evidence.

Catolico likewise disputes petitioners' claim that the audit report and her initial response that she
never received a check were sufficient to justify her dismissal. When she denied having received a
check from YSP, she meant that she did not receive any refund of overprice, consistent with her
position that what she received was a token gift. All that can be gathered from the audit report is that
there was apparently an overcharge, with no basis to conclude that Catolico pocketed the amount in
collusion with YSP. She thus concluded that her dismissal was based on a mere suspicion.
Finally, Catolico insists that she could not have breached the trust and confidence of WATEROUS
because, being merely a pharmacist, she did not handle "confidential information or sensitive
properties." She was doing the task of a saleslady: selling drugs and making requisitions when
supplies were low.

A thorough review of the record leads us to no other conclusion than that, except as to the third
ground, the instant petition must fail.

Concededly, Catolico was denied due process. Procedural due process requires that an employee
be apprised of the charge against him, given reasonable time to answer the charge, allowed ample
opportunity to be heard and defend himself, and assisted by a representative if the employee so
desires. 23 Ample opportunity connotes every kind of assistance that management must accord the
employee to enable him to prepare adequately for his defense, including legal representation. 24

In the case at bar, although Catolico was given an opportunity to explain her side, she was
dismissed from the service in the memorandum of 5 March 1990 issued by her Supervisor after
receipt of her letter and that of her counsel. No hearing was ever conducted after the issues were
joined through said letters. The Supervisor's memorandum spoke of "evidences [sic] in
[WATEROUS] possession," which were not, however, submitted. What the "evidences" [sic] other
than the sales invoice and the check were, only the Supervisor knew.

Catolico was also unjustly dismissed. It is settled that the burden is on the employer to prove just
and valid cause for dismissing an employee, and its failure to discharge that burden would result in a
finding that the dismissal is unjustified. 25 Here, WATEROUS proved unequal to the task.

It is evident from the Supervisor's memorandum that Catolico was dismissed because of an alleged
anomalous transaction with YSP. Unfortunately for petitioners, their evidence does not establish that
there was an overcharge. Control Clerk Eugenio C. Valdez, who claims to have discovered
Catolico's inappropriate transaction, stated in his affidavit: 26

4. My findings revealed that on or before the month of July 31, 1989, Ms. Catolico in violation of
the [company] procedure, made an under the table deal with YSP Phils. to supply WDRC needed
medicines like Voren tablets at a jack-up price of P384.00 per bottle of 50 mg. which has a
previous price of only P320.00;

5. I verified the matter to YSP Phils. to determine the discrepancy and I found out that the
cost per bottle was indeed overpriced. The Accounting Department of YSP Phils. through
Ms. Estelita Reyes confirmed that there was really an overprice and she said that the
difference was refunded through their check voucher no. 629552 which was shown to me
and the payee is Melodia Catolico, through a China Bank Check No. 892068 dated
November 9, 1989.

It clearly appears then that Catolico's dismissal was based on hearsay information. Estelita Reyes
never testified nor executed an affidavit relative to this case; thus, we have to reject the statements
attributed to her by Valdez. Hearsay evidence carries no probative value. 27

Besides, it was never shown that petitioners paid for the Voren tablets. While Valdez informed Co,
through the former's memorandum 28 of 29 January 1990, that WATEROUS paid YSP P3,840.00 "thru
MBTC Check No. 222832," the said check was never presented in evidence, nor was any receipt from
YSP offered by petitioners.
Moreover, the two purchase orders for Voren tablets presented by petitioners do not indicate an
overcharge. The purchase order dated 16 August 1989 29 stated that the Voren tablets cost
P320.00 per box, while the purchase order dated 5 October 1989 30 priced the Voren tablets at
P384.00 per bottle. The difference in price may then be attributed to the different packaging used in each
purchase order.

Assuming that there was an overcharge, the two purchase orders for the Voren tablets were
recommended by Director-MMG Mario R. Panuncio, verified by AVP-MNG Noli M. Lopez and
approved by Vice President-General Manager Emma R. Co. The purchase orders were silent as to
Catolico's participation in the purchase. If the price increase was objectionable to petitioners, they or
their officers should have disapproved the transaction. Consequently, petitioners had no one to
blame for their predicament but themselves. This set of facts emphasizes the exceedingly incredible
situation proposed by petitioners. Despite the memorandum warning Catolico not to negotiate with
suppliers of medicine, there was no proof that she ever transacted, or that she had the opportunity to
transact, with the said suppliers. Again, as the purchase orders indicate, Catolico was not at all
involved in the sale of the Voren tablets. There was no occasion for Catolico to initiate, much less
benefit from, what Valdez called an "under the table deal" with YSP.

Catolico's dismissal then was obviously grounded on mere suspicion, which in no case can justify an
employee's dismissal. Suspicion is not among the valid causes provided by the Labor Code for the
termination of
employment; 31 and even the dismissal of an employee for loss of trust and confidence must rest on
substantial grounds and not on the employer's arbitrariness, whims, caprices, or suspicion. 32 Besides,
Catolico was not shown to be a managerial employee, to which class of employees the term "trust and
confidence" is restricted. 33

As regards the constitutional violation upon which the NLRC anchored its decision, we find no
reason to revise the doctrine laid down in People vs. Marti 34 that the Bill of Rights does not protect
citizens from unreasonable searches and seizures perpetrated by private individuals. It is not true, as
counsel for Catolico claims, that the citizens have no recourse against such assaults. On the contrary,
and as said counsel admits, such an invasion gives rise to both criminal and civil liabilities.

Finally, since it has been determined by the Labor Arbiter that Catolico's reinstatement would not be
to the best interest of the parties, he correctly awarded separation pay to Catolico. Separation pay in
lieu of reinstatement is computed at one month's salary for every year of service. 35 In this case,
however, Labor Arbiter Lopez computed the separation pay at one-half month's salary for every year of
service. Catolico did not oppose or raise an objection. As such, we will uphold the award of separation
pay as fixed by the Labor Arbiter.

WHEREFORE, the instant petition is hereby DISMISSED and the challenged decision and resolution
of the National Labor Relations Commission dated 30 September 1993 and 2 December 1993,
respectively, in NLRC-NCR CA No. 005160-93 are AFFIRMED, except as to its reason for upholding
the Labor Arbiter's decision, viz., that the evidence against private respondent was inadmissible for
having been obtained in violation of her constitutional rights of privacy of communication and against
unreasonable searches and seizures which is hereby set aside.

Costs against petitioners.

SO ORDERED.

G.R. No. 81561 January 18, 1991

PEOPLE OF THE PHILIPPINES, plaintiff-appellee
vs.
ANDRE MARTI, accused-appellant.

The Solicitor General for plaintiff-appellee.

Reynaldo B. Tatoy and Abelardo E. Rogacion for accused-appellant.

BIDIN, J.:

This is an appeal from a decision * rendered by the Special Criminal Court of Manila (Regional Trial Court, Branch XLIX)
convicting accused-appellant of violation of Section 21 (b), Article IV in relation to Section 4, Article 11 and Section 2 (e) (i),
Article 1 of Republic Act 6425, as amended, otherwise known as the Dangerous Drugs Act.

The facts as summarized in the brief of the prosecution are as follows:

On August 14, 1987, between 10:00 and 11:00 a.m., the appellant and his common-law wife, Shirley Reyes, went
to the booth of the "Manila Packing and Export Forwarders" in the Pistang Pilipino Complex, Ermita, Manila,
carrying with them four (4) gift wrapped packages. Anita Reyes (the proprietress and no relation to Shirley Reyes)
attended to them. The appellant informed Anita Reyes that he was sending the packages to a friend in Zurich,
Switzerland. Appellant filled up the contract necessary for the transaction, writing therein his name, passport
number, the date of shipment and the name and address of the consignee, namely, "WALTER FIERZ, Mattacketr
II, 8052 Zurich, Switzerland" (Decision, p. 6)

Anita Reyes then asked the appellant if she could examine and inspect the packages. Appellant, however, refused,
assuring her that the packages simply contained books, cigars, and gloves and were gifts to his friend in Zurich. In
view of appellant's representation, Anita Reyes no longer insisted on inspecting the packages. The four (4)
packages were then placed inside a brown corrugated box one by two feet in size (1' x 2'). Styro-foam was placed
at the bottom and on top of the packages before the box was sealed with masking tape, thus making the box ready
for shipment (Decision, p. 8).

Before delivery of appellant's box to the Bureau of Customs and/or Bureau of Posts, Mr. Job Reyes (proprietor)
and husband of Anita (Reyes), following standard operating procedure, opened the boxes for final inspection.
When he opened appellant's box, a peculiar odor emitted therefrom. His curiousity aroused, he squeezed one of
the bundles allegedly containing gloves and felt dried leaves inside. Opening one of the bundles, he pulled out a
cellophane wrapper protruding from the opening of one of the gloves. He made an opening on one of the
cellophane wrappers and took several grams of the contents thereof(tsn, pp. 29-30, October 6, 1987; Emphasis
supplied).

Job Reyes forthwith prepared a letter reporting the shipment to the NBI and requesting a laboratory examination of
the samples he extracted from the cellophane wrapper (tsn, pp. 5-6, October 6, 1987).

He brought the letter and a sample of appellant's shipment to the Narcotics Section of the National Bureau of
Investigation (NBI), at about 1:30 o'clock in the afternoon of that date, i.e., August 14, 1987. He was interviewed by
the Chief of Narcotics Section. Job Reyes informed the NBI that the rest of the shipment was still in his office.
Therefore, Job Reyes and three (3) NBI agents, and a photographer, went to the Reyes' office at Ermita, Manila
(tsn, p. 30, October 6, 1987).

Job Reyes brought out the box in which appellant's packages were placed and, in the presence of the NBI agents,
opened the top flaps, removed the styro-foam and took out the cellophane wrappers from inside the gloves. Dried
marijuana leaves were found to have been contained inside the cellophane wrappers (tsn, p. 38, October 6, 1987;
Emphasis supplied).

The package which allegedly contained books was likewise opened by Job Reyes. He discovered that the package
contained bricks or cake-like dried marijuana leaves. The package which allegedly contained tabacalera cigars
was also opened. It turned out that dried marijuana leaves were neatly stocked underneath the cigars (tsn, p. 39,
October 6, 1987).
 The NBI agents made an inventory and took charge of the box and of the contents thereof, after signing a
"Receipt" acknowledging custody of the said effects (tsn, pp. 2-3, October 7, 1987).

Thereupon, the NBI agents tried to locate appellant but to no avail. Appellant's stated address in his passport being the
Manila Central Post Office, the agents requested assistance from the latter's Chief Security. On August 27, 1987, appellant,
while claiming his mail at the Central Post Office, was invited by the NBI to shed light on the attempted shipment of the
seized dried leaves. On the same day the Narcotics Section of the NBI submitted the dried leaves to the Forensic Chemistry
Section for laboratory examination. It turned out that the dried leaves were marijuana flowering tops as certified by the
forensic chemist. (Appellee's Brief, pp. 9-11, Rollo, pp. 132-134).

Thereafter, an Information was filed against appellant for violation of RA 6425, otherwise known as the Dangerous Drugs
Act.

After trial, the court a quo rendered the assailed decision.

In this appeal, accused/appellant assigns the following errors, to wit:

THE LOWER COURT ERRED IN ADMITTING IN EVIDENCE THE ILLEGALLY SEARCHED AND SEIZED
OBJECTS CONTAINED IN THE FOUR PARCELS.

THE LOWER COURT ERRED IN CONVICTING APPELLANT DESPITE THE UNDISPUTED FACT THAT HIS
RIGHTS UNDER THE CONSTITUTION WHILE UNDER CUSTODIAL PROCEEDINGS WERE NOT OBSERVED.

THE LOWER COURT ERRED IN NOT GIVING CREDENCE TO THE EXPLANATION OF THE APPELLANT ON
HOW THE FOUR PARCELS CAME INTO HIS POSSESSION (Appellant's Brief, p. 1; Rollo, p. 55)

1. Appellant contends that the evidence subject of the imputed offense had been obtained in violation of his constitutional
rights against unreasonable search and seizure and privacy of communication (Sec. 2 and 3, Art. III, Constitution) and
therefore argues that the same should be held inadmissible in evidence (Sec. 3 (2), Art. III).

Sections 2 and 3, Article III of the Constitution provide:

Sec. 2. The right of the people to be secure in their persons, houses, papers and effects against unreasonable
searches and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or
warrant of arrest shall issue except upon probable cause to be determined personally by the judge after
examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly
describing the place to be searched and the persons or things to be seized.

Sec. 3. (1) The privacy of communication and correspondence shall be inviolable except upon lawful order of the
court, or when public safety or order requires otherwise as prescribed by law.

(2) Any evidence obtained in violation of this or the preceding section shall be inadmissible for any purpose in any
proceeding.

Our present constitutional provision on the guarantee against unreasonable search and seizure had its origin in the 1935
Charter which, worded as follows:

The right of the people to be secure in their persons, houses, papers and effects against unreasonable searches
and seizures shall not be violated, and no warrants shall issue but upon probable cause, to be determined by the
judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and
particularly describing the place to be searched, and the persons or things to be seized. (Sec. 1 [3], Article III)

was in turn derived almost verbatim from the Fourth Amendment ** to the United States Constitution. As such, the Court
may turn to the pronouncements of the United States Federal Supreme Court and State Appellate Courts which are
considered doctrinal in this jurisdiction.

Thus, following the exclusionary rule laid down in Mapp v. Ohio by the US Federal Supreme Court (367 US 643, 81 S.Ct.
1684, 6 L.Ed. 1081 [1961]), this Court, in Stonehill v. Diokno (20 SCRA 383 [1967]), declared as inadmissible any evidence
obtained by virtue of a defective search and seizure warrant, abandoning in the process the ruling earlier adopted
in Moncado v. People's Court (80 Phil. 1 [1948]) wherein the admissibility of evidence was not affected by the illegality of its
seizure. The 1973 Charter (Sec. 4 [2], Art. IV) constitutionalized the Stonehill ruling and is carried over up to the present with
the advent of the 1987 Constitution.

In a number of cases, the Court strictly adhered to the exclusionary rule and has struck down the admissibility of evidence
obtained in violation of the constitutional safeguard against unreasonable searches and seizures. (Bache & Co., (Phil.), Inc.,
v. Ruiz, 37 SCRA 823 [1971]; Lim v. Ponce de Leon, 66 SCRA 299 [1975]; People v. Burgos, 144 SCRA 1 [1986]; Roan v.
Gonzales, 145 SCRA 687 [1987]; See also Salazar v. Hon. Achacoso, et al., GR No. 81510, March 14, 1990).

It must be noted, however, that in all those cases adverted to, the evidence so obtained were invariably procured by the
State acting through the medium of its law enforcers or other authorized government agencies.

On the other hand, the case at bar assumes a peculiar character since the evidence sought to be excluded was primarily
discovered and obtained by a private person, acting in a private capacity and without the intervention and participation of
State authorities. Under the circumstances, can accused/appellant validly claim that his constitutional right against
unreasonable searches and seizure has been violated? Stated otherwise, may an act of a private individual, allegedly in
violation of appellant's constitutional rights, be invoked against the State?

We hold in the negative. In the absence of governmental interference, the liberties guaranteed by the Constitution cannot be
invoked against the State.

As this Court held in Villanueva v. Querubin (48 SCRA 345 [1972]:

1. This constitutional right (against unreasonable search and seizure) refers to the immunity of one's person,
whether citizen or alien, from interference by government, included in which is his residence, his papers, and other
possessions. . . .

. . . There the state, however powerful, does not as such have the access except under the circumstances above
noted, for in the traditional formulation, his house, however humble, is his castle. Thus is outlawed any
unwarranted intrusion by government, which is called upon to refrain from any invasion of his dwelling and to
respect the privacies of his life. . . . (Cf. Schermerber v. California, 384 US 757 [1966] and Boyd v. United States,
116 US 616 [1886]; Emphasis supplied).

In Burdeau v. McDowell (256 US 465 (1921), 41 S Ct. 547; 65 L.Ed. 1048), the Court there in construing the right against
unreasonable searches and seizures declared that:

(t)he Fourth Amendment gives protection against unlawful searches and seizures, and as shown in previous
cases, its protection applies to governmental action. Its origin and history clearly show that it was intended as a
restraint upon the activities of sovereign authority, and was not intended to be a limitation upon other than
governmental agencies; as against such authority it was the purpose of the Fourth Amendment to secure the
citizen in the right of unmolested occupation of his dwelling and the possession of his property, subject to the right
of seizure by process duly served.

The above ruling was reiterated in State v. Bryan (457 P.2d 661 [1968]) where a parking attendant who searched the
automobile to ascertain the owner thereof found marijuana instead, without the knowledge and participation of police
authorities, was declared admissible in prosecution for illegal possession of narcotics.

And again in the 1969 case of Walker v. State (429 S.W.2d 121), it was held that the search and seizure clauses are
restraints upon the government and its agents, not upon private individuals (citing People v. Potter, 240 Cal. App.2d 621, 49
Cap. Rptr, 892 (1966); State v. Brown, Mo., 391 S.W.2d 903 (1965); State v. Olsen, Or., 317 P.2d 938 (1957).

Likewise appropos is the case of Bernas v. US (373 F.2d 517 (1967). The Court there said:

The search of which appellant complains, however, was made by a private citizen the owner of a motel in which
appellant stayed overnight and in which he left behind a travel case containing the evidence***complained of. The
search was made on the motel owner's own initiative. Because of it, he became suspicious, called the local police,
informed them of the bag's contents, and made it available to the authorities.

The fourth amendment and the case law applying it do not require exclusion of evidence obtained through a
search by a private citizen. Rather, the amendment only proscribes governmental action."
The contraband in the case at bar having come into possession of the Government without the latter transgressing
appellant's rights against unreasonable search and seizure, the Court sees no cogent reason why the same should not be
admitted against him in the prosecution of the offense charged.

Appellant, however, would like this court to believe that NBI agents made an illegal search and seizure of the evidence later
on used in prosecuting the case which resulted in his conviction.

The postulate advanced by accused/appellant needs to be clarified in two days. In both instances, the argument stands to
fall on its own weight, or the lack of it.

First, the factual considerations of the case at bar readily foreclose the proposition that NBI agents conducted an illegal
search and seizure of the prohibited merchandise. Records of the case clearly indicate that it was Mr. Job Reyes, the
proprietor of the forwarding agency, who made search/inspection of the packages. Said inspection was reasonable and a
standard operating procedure on the part of Mr. Reyes as a precautionary measure before delivery of packages to the
Bureau of Customs or the Bureau of Posts (TSN, October 6 & 7, 1987, pp. 15-18; pp. 7-8; Original Records, pp. 119-122;
167-168).

It will be recalled that after Reyes opened the box containing the illicit cargo, he took samples of the same to the NBI and
later summoned the agents to his place of business. Thereafter, he opened the parcel containing the rest of the shipment
and entrusted the care and custody thereof to the NBI agents. Clearly, the NBI agents made no search and seizure, much
less an illegal one, contrary to the postulate of accused/appellant.

Second, the mere presence of the NBI agents did not convert the reasonable search effected by Reyes into a warrantless
search and seizure proscribed by the Constitution. Merely to observe and look at that which is in plain sight is not a search.
Having observed that which is open, where no trespass has been committed in aid thereof, is not search (Chadwick v. State,
429 SW2d 135). Where the contraband articles are identified without a trespass on the part of the arresting officer, there is
not the search that is prohibited by the constitution (US v. Lee 274 US 559, 71 L.Ed. 1202 [1927]; Ker v. State of California
374 US 23, 10 L.Ed.2d. 726 [1963]; Moore v. State, 429 SW2d 122 [1968]).

In Gandy v. Watkins (237 F. Supp. 266 [1964]), it was likewise held that where the property was taken into custody of the
police at the specific request of the manager and where the search was initially made by the owner there is no unreasonable
search and seizure within the constitutional meaning of the term.

That the Bill of Rights embodied in the Constitution is not meant to be invoked against acts of private individuals finds
support in the deliberations of the Constitutional Commission. True, the liberties guaranteed by the fundamental law of the
land must always be subject to protection. But protection against whom? Commissioner Bernas in his sponsorship speech in
the Bill of Rights answers the query which he himself posed, as follows:

First, the general reflections. The protection of fundamental liberties in the essence of constitutional democracy.
Protection against whom? Protection against the state. The Bill of Rights governs the relationship between the
individual and the state. Its concern is not the relation between individuals, between a private individual and other
individuals. What the Bill of Rights does is to declare some forbidden zones in the private sphere inaccessible to
any power holder. (Sponsorship Speech of Commissioner Bernas , Record of the Constitutional Commission, Vol.
1, p. 674; July 17, 1986; Emphasis supplied)

The constitutional proscription against unlawful searches and seizures therefore applies as a restraint directed only against
the government and its agencies tasked with the enforcement of the law. Thus, it could only be invoked against the State to
whom the restraint against arbitrary and unreasonable exercise of power is imposed.

If the search is made upon the request of law enforcers, a warrant must generally be first secured if it is to pass the test of
constitutionality. However, if the search is made at the behest or initiative of the proprietor of a private establishment for its
own and private purposes, as in the case at bar, and without the intervention of police authorities, the right against
unreasonable search and seizure cannot be invoked for only the act of private individual, not the law enforcers, is involved.
In sum, the protection against unreasonable searches and seizures cannot be extended to acts committed by private
individuals so as to bring it within the ambit of alleged unlawful intrusion by the government.

Appellant argues, however, that since the provisions of the 1935 Constitution has been modified by the present phraseology
found in the 1987 Charter, expressly declaring as inadmissible any evidence obtained in violation of the constitutional
prohibition against illegal search and seizure, it matters not whether the evidence was procured by police authorities or
private individuals (Appellant's Brief, p. 8, Rollo, p. 62).
The argument is untenable. For one thing, the constitution, in laying down the principles of the government and fundamental
liberties of the people, does not govern relationships between individuals. Moreover, it must be emphasized that the
modifications introduced in the 1987 Constitution (re: Sec. 2, Art. III) relate to the issuance of either a search warrant or
warrant of arrest vis-a-vis the responsibility of the judge in the issuance thereof (SeeSoliven v. Makasiar, 167 SCRA 393
[1988]; Circular No. 13 [October 1, 1985] and Circular No. 12 [June 30, 1987]. The modifications introduced deviate in no
manner as to whom the restriction or inhibition against unreasonable search and seizure is directed against. The restraint
stayed with the State and did not shift to anyone else.

Corolarilly, alleged violations against unreasonable search and seizure may only be invoked against the State by an
individual unjustly traduced by the exercise of sovereign authority. To agree with appellant that an act of a private individual
in violation of the Bill of Rights should also be construed as an act of the State would result in serious legal complications
and an absurd interpretation of the constitution.

Similarly, the admissibility of the evidence procured by an individual effected through private seizure equally applies, in pari
passu, to the alleged violation, non-governmental as it is, of appellant's constitutional rights to privacy and communication.

2. In his second assignment of error, appellant contends that the lower court erred in convicting him despite the undisputed
fact that his rights under the constitution while under custodial investigation were not observed.

Again, the contention is without merit, We have carefully examined the records of the case and found nothing to indicate, as
an "undisputed fact", that appellant was not informed of his constitutional rights or that he gave statements without the
assistance of counsel. The law enforcers testified that accused/appellant was informed of his constitutional rights. It is
presumed that they have regularly performed their duties (See. 5(m), Rule 131) and their testimonies should be given full
faith and credence, there being no evidence to the contrary. What is clear from the records, on the other hand, is that
appellant refused to give any written statement while under investigation as testified by Atty. Lastimoso of the NBI, Thus:

Fiscal Formoso:

You said that you investigated Mr. and Mrs. Job Reyes. What about the accused here, did you investigate the
accused together with the girl?

WITNESS:

Yes, we have interviewed the accused together with the girl but the accused availed of his constitutional right not
to give any written statement, sir. (TSN, October 8, 1987, p. 62; Original Records, p. 240)

The above testimony of the witness for the prosecution was not contradicted by the defense on cross-examination. As borne
out by the records, neither was there any proof by the defense that appellant gave uncounselled confession while being
investigated. What is more, we have examined the assailed judgment of the trial court and nowhere is there any reference
made to the testimony of appellant while under custodial investigation which was utilized in the finding of conviction.
Appellant's second assignment of error is therefore misplaced.

3. Coming now to appellant's third assignment of error, appellant would like us to believe that he was not the owner of the
packages which contained prohibited drugs but rather a certain Michael, a German national, whom appellant met in a pub
along Ermita, Manila: that in the course of their 30-minute conversation, Michael requested him to ship the packages and
gave him P2,000.00 for the cost of the shipment since the German national was about to leave the country the next day
(October 15, 1987, TSN, pp. 2-10).

Rather than give the appearance of veracity, we find appellant's disclaimer as incredulous, self-serving and contrary to
human experience. It can easily be fabricated. An acquaintance with a complete stranger struck in half an hour could not
have pushed a man to entrust the shipment of four (4) parcels and shell out P2,000.00 for the purpose and for appellant to
readily accede to comply with the undertaking without first ascertaining its contents. As stated by the trial court, "(a) person
would not simply entrust contraband and of considerable value at that as the marijuana flowering tops, and the cash amount
of P2,000.00 to a complete stranger like the Accused. The Accused, on the other hand, would not simply accept such
undertaking to take custody of the packages and ship the same from a complete stranger on his mere say-so" (Decision, p.
19, Rollo, p. 91). As to why he readily agreed to do the errand, appellant failed to explain. Denials, if unsubstantiated by
clear and convincing evidence, are negative self-serving evidence which deserve no weight in law and cannot be given
greater evidentiary weight than the testimony of credible witnesses who testify on affirmative matters (People v. Esquillo,
171 SCRA 571 [1989]; People vs. Sariol, 174 SCRA 237 [1989]).
Appellant's bare denial is even made more suspect considering that, as per records of the Interpol, he was previously
convicted of possession of hashish by the Kleve Court in the Federal Republic of Germany on January 1, 1982 and that the
consignee of the frustrated shipment, Walter Fierz, also a Swiss national, was likewise convicted for drug abuse and is just
about an hour's drive from appellant's residence in Zurich, Switzerland (TSN, October 8, 1987, p. 66; Original Records, p.
244; Decision, p. 21; Rollo, p. 93).

Evidence to be believed, must not only proceed from the mouth of a credible witness, but it must be credible in itself such as
the common experience and observation of mankind can approve as probable under the circumstances (People v. Alto, 26
SCRA 342 [1968], citing Daggers v. Van Dyke, 37 N.J. Eg. 130; see also People v. Sarda, 172 SCRA 651 [1989]; People v.
Sunga, 123 SCRA 327 [1983]); Castaares v. CA, 92 SCRA 567 [1979]). As records further show, appellant did not even
bother to ask Michael's full name, his complete address or passport number. Furthermore, if indeed, the German national
was the owner of the merchandise, appellant should have so indicated in the contract of shipment (Exh. "B", Original
Records, p. 40). On the contrary, appellant signed the contract as the owner and shipper thereof giving more weight to the
presumption that things which a person possesses, or exercises acts of ownership over, are owned by him (Sec. 5 [j], Rule
131). At this point, appellant is therefore estopped to claim otherwise.

Premises considered, we see no error committed by the trial court in rendering the assailed judgment.

WHEREFORE, the judgment of conviction finding appellant guilty beyond reasonable doubt of the crime charged is hereby
AFFIRMED. No costs.

SO ORDERED.