Agabon v. National Labor Relations Commission

EN BANC
[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 : p
This petition for review seeks to reverse the decision 1 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,
1992 2 until February 23, 1999 when they were dismissed for abandonment of work.
Petitioners then led a complaint for illegal dismissal and payment of money claims
3 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 nd 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
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Upon denial of their motion for reconsideration, petitioners led 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. aIcCTA
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 bene ts 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 Paci c 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 led the illegal dismissal
case. 1 0
It is well-settled that ndings of fact of quasi-judicial agencies like the NLRC are
accorded not only respect but even nality if the ndings are supported by substantial
evidence. This is especially so when such ndings were a rmed by the Court of Appeals.
1 1 However, if the factual ndings of the NLRC and the Labor Arbiter are con icting, as in
this case, the reviewing court may delve into the records and examine for itself the
questioned findings. 1 2
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. 1 3 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 unjusti ed refusal of an employee to resume his
employment. 1 4 It is a form of neglect of duty, hence, a just cause for termination of
employment by the employer. 1 5 For a valid nding of abandonment, these two factors
should be present: (1) the failure to report for work or absence without valid or justi able
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. 1 6
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 rst 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. 1 7
I n Sandoval Shipyard v. Clave , 1 8 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 conduct 1 9 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. 2 0
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 de ned 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;
CaEATI

(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 rst 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 bene ts 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 in rmity
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. 2 1 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. 2 2
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, 2 3 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 o ce 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." 2 4 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. 2 5
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. AcIaST
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
signi cant 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 nds 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
bene ts 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 justi ed or
authorized causes provided by law. Payment of backwages and other bene ts, 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. 2 6 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. 2 7 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.
I n Sebuguero v. National Labor Relations Commission , 2 8 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 indemni cation or penalty, and depends on the facts of each case and the gravity of the
omission committed by the employer.
I n Nath v. National Labor Relations Commission , 2 9 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, 3 0 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. . . . 3 1
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. DTAHEC
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 in rmity
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 ed
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. 3 2
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. 3 3
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." 3 4
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 ttingly extends its
sympathy and compassion. But never is it justi ed 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. 3 5
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 . 3 6 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 indemni cation 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. 3 7
As enunciated by this Court in Viernes v. National Labor Relations Commissions , 3 8
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, xed
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. 3 9
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. 4 0 Considering the prevailing circumstances in the
case at bar, we deem it proper to x 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 a rm 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 les, 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. 4 1
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 bene ts 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 bene t in the years disputed. 4 2 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 nd 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 same 4 3 so as "to further protect the level of
real wages from the ravages of world-wide in ation." 4 4 Clearly, as additional income, the
13th month pay is included in the de nition 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 xed
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 113 4 5 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. STCDaI
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, nding 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 is AFFIRMED with the MODIFICATION that private respondent Riviera
Home Improvements, Inc. is further ORDERED 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.
Quisumbing, Carpio, Carpio-Morales, Callejo, Sr. and Azcuna, JJ ., concur.
Davide, Jr., C .J ., I join Mr. Justice Puno in his dissenting opinion.
Puno and Panganiban, JJ ., See dissenting opinion.
Sandoval-Gutierrez, J ., I join Justice Puno in his dissent.
Austria-Martinez, J ., I join in the separate opinion of Justice Tinga.
Corona, J ., is on leave.
Tinga, J ., In the result, per separate opinion.
Chico-Nazario, J ., I concur in J. Puno's dissenting opinion.
Garcia, J ., I join J. Puno's dissenting opinion.
PUNO , J., dissenting:
"Strike if you will, but hear me rst !" was adjuration of Themistocles, c. 528–462
B.C., Athenian General and Statesman, to Eurybiades, Admiral of the Spartan eet, who, in
an argument, raised his staff as though to strike him. 1 It was the same plea, centuries
later, of petitioner-employees Jenny M. Agabon and Virgilio C. Agabon to their employer
who fired them from their jobs without hearing them first.
In the last two decades, this Court has wrestled with due process issues in
dismissal cases. In February 1989, Wenphil Corporation v. National Labor Relations
Commission 2 put an abrupt end to the long-standing doctrine nullifying the dismissal of an
employee even if based on a just or authorized cause, if done without prior notice to the
employee. Wenphil upheld the dismissal of a crew of a fast food chain for just cause even
if it was effected without the requisite notice. And in compensation for the deprivation of
his prior right to notice and investigation before dismissal, he was given a measly sum of
P1,000.00. Since then, lowly employees have been cut-off from their bloodline — their jobs
— without due process of law.
A decade later, we re-examined Wenphil in Serrano v. National Labor Relations
Commission 3 but the struggle of our employees for job security turned from bad to
worse. In Serrano, the majority held 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." 4 Thus, the dismissal without prior notice was further legalized and the
dismissed employee was simply awarded some crumbs — backwages from the time his
employment was terminated until it was determined that the termination was for an
authorized cause. I dissented and voted for the return of the pre-Wenphil rule to stop the
pernicious practice of dismissals without prior notice.
After four years of the Serrano rule, I see no reason to relent from my Dissenting
Opinion as the situation has even turned from worse to worst. Agabon is doing away with
the crumbs and is leaving the employee with no more than a tiny bit of grain. As such, I feel
the strong urgency to right away revert to the pre-Wenphil era to rectify a grave error and
atone for the wanton, albeit now licensed, violation of the pre-dismissal notice requirement
committed by employers with twisted ethos.
There are enduring reasons for resisting Wenphil, its clone Serrano, and now their
offspring Agabon. As I said in Serrano —
Our ten (10) years experience with Wenphil is not a happy one.
Unscrupulous employers have abused the Wenphil ruling. They have dismissed
without notice employees including those who are not as eminently undesirable
as the Wenphil employee. They dismissed employees without notice as a general
rule when it should be the exception. The purpose of the pre-dismissal notice
requirement was entirely defeated by employers who were just too willing to pay
an indemnity for its violation. The result, as the majority concedes, is that the
indemnity we imposed has not been effective to prevent unjust dismissals of
employees. To be sure, this is even a supreme understatement. The ugly truth is
that Wenphil is the mother of many unjust and unauthorized dismissals of
employees who are too weak to challenge their powerful employers. acCETD
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 ne, we
should strike down as illegal the dismissal of an employee even if it is for a
justi ed end if it is done thru unjusti ed means for we cannot be disciples of the
Machiavellian doctrine of the end justi es the means. With due respect, the
majority decision comes too near this mischievous doctrine by giving emphasis
on the end and not on 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.
xxx xxx xxx

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 [moneyed] 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 a rms 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 the 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. 5
The instant case is a perfect portrait of this reversal of fortune. On January 2, 1992,
petitioners Jenny Agabon and Virgilio Agabon were hired as gypsum board and cornice
installers by respondent Riviera Home Improvements, Inc., a corporation engaged in the
business of selling and installing ornamental and construction materials. Seven (7) years
later, on February 23, 1999, their services were terminated on the ground of abandonment
of work. Apparently, petitioners were subcontracting installation jobs for another company
and were frequently absent from work. Thus, when petitioners reported for work on
February 23, 1999, respondent company simply refused to reemploy them unless they
agree to work on a "pakyaw" basis. Petitioners demurred since this would mean losing
their bene ts. They were given their walking papers without according them the twin
requirements of notice and hearing. Respondent company stated that they abandoned
their jobs. Hence, petitioners led a complaint for illegal dismissal and payment of money
claims against respondent company.
On December 28, 1999, the Labor Arbiter held that the dismissal of petitioners was
illegal and ordered respondent company to pay them backwages, holiday and service
incentive leave pay, and separation pay in lieu of reinstatement. On appeal, the NLRC
reversed the decision of the Labor Arbiter and ruled that the latter erred in awarding
backwages and separation pay to petitioners who deliberately abandoned their work. On
certiorari, the Court of Appeals a rmed the ndings of the NLRC but ordered respondent
company to pay petitioners their money claims. Hence, this petition for review on the lone
issue of whether petitioners were illegally dismissed from the service.
While I appreciate the view of Mme. Justice Ynares-Santiago that "[t]he indemnity to
be imposed should be stiffer in order to discourage the abhorrent practice of 'dismiss
now, pay later,'" 6 the majority, however, simply retained, if not diminished, the indemnity
granted to the dismissed employees. Consequently, I respectfully dissent and maintain my
view that the workingman's right to job security and due process of law cannot be
measured with a reduced price tag. The majority opinion treats an employee's right to due
process as no more than an abstract declaration. I am unwilling to diminish petitioners'
constitutional right to procedural due process which is necessary to protect their security
of tenure. I proffer the following precepts:
One. Our Constitution is an ode to social justice. The Court should give due
obeisance to this ode for social justice is not a mere euphony of words. In other countries,
political debates over the last two centuries continue to rage on whether social rights
should be given constitutional protection. 7 In our jurisdiction, however, constitutional
social rights have long been embedded in all our Constitutions, and thus at the very least
should be respected and protected by our courts.
Social justice is that virtue by which individuals and groups ful ll their obligations to
human society by contributing positively to the complete well-being of their fellowmen
considered as members of that society, and hence regulate all their actions accordingly. 8
Social justice as a creed in the 1935 Constitution was crafted by Delegate Jose C. Locsin.
He persistently pounced on the necessity of including social justice in the Constitution to
protect those who have little in life. In the course of the debates, the core concept of social
justice was developed to mean —
. . . justice to the common tao, the "little man" so-called. It means justice to
him, his wife, and children in relation to their employers in the factories, in the
farms, in the mines, and in other employments. It means justice to him in the
education of his children in the schools, in his dealings with the different o ces
of the government, including the courts of justice. 9
1935 Constitution
Thus, Article II (Declaration of Principles), Section 5 of the 1935 Constitution,
provides that "[t]he promotion of social justice to insure the well-being and economic
security of all the people should be the concern of the State." Mr. Justice Jose Laurel, in his
concurring opinion in the main case of Ang Tibay v. Court of Industrial Relations , 1 0
explained the constitutional milestone —
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 di culties which faced them and endeavored to crystallize, with more or less
delity, the political, social and economic propositions of their age . . . (by
inserting) general provisions 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 Leibinitz many years ago to be secured through the
counterbalancing of economic and social forces and opportunities which should
be regulated, if not controlled by the State or placed, as it were, in custodia
societatis. "The promotion of social justice to insure the well-being and economic
security of all the people" was thus inserted as a vital principle in our Constitution.
11
And, as quoted in the 1940 case of Antamok Goldl elds Mining Company v. Court of
Industrial Relations, 1 2 this Court held that in order that the declaration of the principle of
social justice "may not just be an empty medley of words, the Constitution in various
sections thereof has provided the means towards its realization." 1 3 Thus, the promotion of
the welfare of the working classes was concretized in Article XIII (General Provisions),
Section 6, which mandates that "[t]he State shall afford protection to labor, especially to
working women and minors, and shall regulate the relations . . . between labor and capital
in industry and in agriculture. The State may provide for compulsory arbitration." EcDSHT
Delegate Locsin even exerted a last-ditch effort to amend the draft of the
constitutional provision on labor to read in part, "[t]he State recognizes the right of all
workers to work and shall enact laws protecting labor." In defense of his substitute
amendment, Delegate Locsin in a stirring speech dwelt on the necessity of paying more
attention to the needs of the working class and of including in the Constitution a provision
guaranteeing to all workers the right to work. His substitute amendment was however
defeated, but only because his ideas were already said to be within the scope of the
constitutional provisions on social justice and on labor which was then being considered.
14
As early as Calalang v. Williams , 1 5 the Court already threw in some wind of caution
—
The promotion of social justice, however, is to be achieved not through a
mistaken sympathy towards any given group. Social justice is "neither
communism, nor despotism, nor atomism, nor anarchy," but the humanization of
laws and the equalization of social and economic forces by the State so that
justice in its rational and objectively secular conception may at least be
approximated. Social justice means the promotion of the welfare of all the people,
the adoption by the Government of measures calculated to [e]nsure economic
stability of all the competent elements of society, through the maintenance of a
proper economic and social equilibrium in the interrelations of the members of
the community, constitutionally, through the adoption of measures legally
justi able, or extra-constitutionally, through the exercise of powers underlying the
existence of all governments on the time-honored principle of salus populi est
suprema lex. 1 6
Social justice, therefore, must be founded on the recognition of the
necessity of interdependence among divers and 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."
17
Indeed, in light of the accelerated pace of Philippine industrialization then, the

Filipinos who used to be more or less anchored to the soil and living comparatively simple
lives were fast becoming full- edged members of the complex and impersonal industrial
society. They and their families were entirely at the mercy of the severities of the labor
system. They were wholly dependent for their subsistence, sustenance and sheer survival
on a job and regular wage.
In time, Mr. Chief Justice Enrique M. Fernando drew the arches of social justice as
follows:
What is thus stressed is that a fundamental principle as social justice,
identi ed as it is with the broad scope of police power, has an even more basic
role to play in aiding those whose lives are spent in toil, with destitution an ever-
present threat, to attain a certain degree of economic well-being. Precisely,
through the social justice coupled with the protection to labor provisions, the
government is enabled to pursue an active and militant policy to give reality and
substance to the proclaimed aspiration of a better life and more decent living
conditions for all. It is in that spirit that in 1969, in Del Rosario vs. Delos Santos
(L-20586, March 21, 1969, 22 SCRA 1196), reference was made to what the social
justice concept signi es in the realistic language of the late President
Magsaysay: "He who has less in life should have more in law." After tracing the
course of decisions which spoke uniformly to the effect that the tenancy
legislation, now on the statute books, is not vitiated by constitutional in rmity, the
Del Rosario opinion made clear why it is easily understandable "from the
enactment of the Constitution with its avowed concern for those who have less in
life, [that] the constitutionality of such legislation has been repeatedly upheld."
What is sought to be accomplished by the above fundamental principle is to
assure the effectiveness of the community's effort to assist the economically
underprivileged. For under existing conditions, without succor and support, they
might not, unaided, be able to secure justice for themselves. 1 8
1973 Constitution
The 1973 Constitution carried over the concept of social justice under the 1935
Constitution. 1 9 Article II (Declaration of Principles and State Policies), Section 6 of the
1973 Constitution, provides that "[t]he State shall promote social justice to ensure the
dignity, welfare, and security of all the people . Towards this end, the State shall regulate
the acquisition, ownership, use, enjoyment, and disposition of private property, and
equitably diffuse property ownership and pro ts." Its counterpart provision on labor was
speci c and categorical. Article II (Declaration of Principles and State Policies), Section 9
of the 1973 Constitution, commands that "[t]he State shall afford protection to labor,
promote full employment, ensure equal work opportunities regardless of sex, race or
creed, and regulate the relations between workers and employers. The State shall assure
the rights of workers to self-organization, collective bargaining, security of tenure, and just
and humane conditions of work. The State may provide for compulsory arbitration." The
elevation of this provision in the Declaration of Principles and State Policies of the 1973
Constitution underscored its sublime signi cance. Hence, in Philippine Apparel Workers
Union v. National Labor Relations Commission , 2 0 this Court explained that this obligation
of the State to the workingman has repercussions on the stability, if not survival, of the
nation itself —
More than elusive justice, survival is the daily problem of the worker and
his family. The employer is not faced with such a problem. More often than not,
the employer dissipates part of his income or pro t in pleasures of the esh and
gambling aside from luxuries, fabulous parties and conspicuous consumption.
The stability of the economy does not depend on the employer alone, but
on government economic policies concerning productivity in all areas and not
only in the clothing or textile industries. There is not even an intimation that the
company is losing. It is the living wage of the workers which is the basis of a
stable economy. If the company cannot pay a living wage, it has no business
operating at the expense of the lives of its workers from the very start.
The preservation of the lives of the citizens is a basic duty of the State,
more vital than the preservation of the pro ts of the corporation. When the State
is engaged in a life-and-death struggle, like war or rebellion, it is the citizen worker
who ghts in defense of the State and for the preservation of the existence of
corporations and businesses within its territorial con nes. When the life of the
State is threatened from within and without, it is the citizen, not the corporation or
business enterprise, that mans the weapons of war and march into battle.
To invoke the nebulous term "stable economy" to justify rejection of the

claims of the workers as against the assets of the employer, is to regard human
life as more expendable than corporate capital. There is nothing in the
Constitution that expressly guarantees the viability of business enterprises much
less assuring them of profits. 2 1
Thus, in a rming the reinstatement of an employee, this Court in Philippine Air Lines
v. Philippine Air Lines Employees Association 2 2 held that —
[t]he futility of this appeal becomes even more apparent considering the
express provision in the Constitution already noted, requiring the State to assure
workers "security of tenure." It was not that speci c in the 1935 Charter. The
mandate was limited to the State affording "protection to labor, especially to
working women and minors . . ." If by virtue of the above, it would not be legally
justi able to reverse the order of reinstatement, it becomes even more readily
apparent that such a conclusion is even more unwarranted now. To reach it
would be to show lack of fealty to a constitutional command. 2 3
1987 Constitution
The 1987 Constitution has deepened the roots of social justice and expanded its
branches to include "all phases of national development." 2 4 An entire article was devoted
to Social Justice and Human Rights 2 5 which properly includes a full section on labor —
LABOR
Sec. 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of
employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective

bargaining and negotiations, and peaceful concerted activities, including the right
to strike in accordance with law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage. They shall also participate in
policy and decision-making processes affecting their rights and bene ts as may
be provided by law. TICaEc
The State shall promote the principle of shared responsibility between

workers and employers and the preferential use of voluntary modes in settling
disputes, including conciliation, and shall enforce their mutual compliance
therewith to foster industrial peace.
The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and the
right of enterprises to reasonable returns on investments, and to expansion and
growth.
Then, Article II (Declaration of Principles and State Policies), Section 18 of the 1987
Constitution, provides that "[t]he State a rms labor as a primary social economic force. It
shall protect the rights of workers and promote their welfare." Under Article II (Declaration
of Principles and State Policies), Section 9 of the 1987 Constitution, "[t]he State shall
promote a just and dynamic social order that will ensure the prosperity and independence
of the nation and free the people from poverty through policies that provide adequate
social services, promote full employment, a rising standard of living and an improved
quality of life for all." These provisions protecting labor are not mere beliefs but should be
reinforced by everyone's behavior.
The Labor Code of the Philippines and its Implementing Rules
In 1974, P.D. No. 442, as amended, otherwise known as the Labor Code of the
Philippines, was enacted. There was power in its purpose which was trumpeted in its title
— to afford protection to labor, promote employment and human resources development
and insure industrial peace based on social justice. Article 3 of its Preliminary Title under
General Provisions provides —
ART. 3. Declaration of basic policy . — The State shall afford protection to
labor, promote full employment, ensure equal work opportunities regardless of
sex, race or creed, and regulate the relations between workers and employers. The
State shall assure the rights of workers to self-organization, collective bargaining,
security of tenure, and just and humane conditions of work.
Under Labor Relations (Book Five), Article 211 states —

ART. 211. Declaration of Policy . — A. It is the policy of the State:
(a) To promote and emphasize the primacy of free collective

bargaining and negotiations, including voluntary arbitration, mediation and
conciliation, as modes of settling labor or industrial disputes;
(b) To promote free trade unionism as an instrument for the

enhancement of democracy and the promotion of social justice and
development;
(c) To foster the free and voluntary organization of a strong and
united labor movement;
(d) To promote the enlightenment of workers concerning their rights

and obligations as union members and as employees;
(e) To provide an adequate administrative machinery for the
expeditious settlement of labor or industrial peace;
(f) To ensure a stable but dynamic and just industrial peace; and
(g) To ensure the participation of workers in decision and policy-
making processes affecting their rights, duties and welfare.
In May 1980 and then again in March 1989, B.P. Blg. 70 and R.A. No. 6715 were
approved, respectively, " to strengthen the constitutional right of workers", and "to extend
protection to labor." Accordingly, Volkschel Labor Union v. Bureau of Labor Relations , 2 6
decreed that "[i]n the implementation and interpretation of the provisions of the Labor
Code and its implementing regulations, the workingman's welfare should be the primordial
and paramount consideration." 2 7
Two. Courts at all times should give meaning and substance to constitutional
postulates in favor of the workingman. The 1987 Constitution is fraught with provisions
protecting the workingman, e.g ., Secs. 9, 10 and 18, Art. II, and Sec. 3, Art XIII, a legacy of
the evolution off rights. These constitutional creeds should not be dwarfed by deeds. A
contrary posture would convert these creeds as "meaningless constitutional patter." 2 8 The
principle of social justice was not embedded in the fundamental law for demagoguery. It
was meant to be a vital, articulate, compelling principle of public policy. 2 9 Social justice
should be a living reality and not a mere high level abstraction. 3 0 Thus, while the
Constitution must be read as a whole, even if we do not invoke its Due Process Clause, the
coherent application of the separate constitutional creeds on social justice and labor is
enough to uphold the workers' constitutional right to work and their consequent right to
job security. These substantive rights are not to be weakened by a diminished procedural
right. For in weakening the procedure, we weaken the substantive right. The importance of
the procedure to protect the exercise of the right to work cannot be overemphasized.
I have always, as I do now, adhered to the constitutional precepts of social justice
and protection to labor. Some years back, in Pepito v. Secretary of Labor , 3 1 I, as an
Assistant Solicitor General, invoked the argument of constitutional guarantee of security of
tenure as the rationale for the reinstatement of an employee. The argument was sustained
by this Court speaking through Mr. Chief Justice Fernando no less —
. . . As set forth in the Comment, considered as the answer, Solicitor
General Estelito P. Mendoza, Assistant Solicitor General Reynato S. Puno and
Solicitor Jesus V. Diaz "are of the opinion that petitioner's reinstatement is in
order." Their view follows from pronouncements of this Tribunal "handed down in
consonance with the social justice and protection to labor provisions of the
Constitution."
. . . That point is well-taken. In the latest case in point, Meracap v.

International Ceramics Mfg. Co., Inc., this Court left no doubt that it is committed
to the principle of vitalizing "the constitutional mandate of security of tenure as
an aspect of the protection accorded labor." There should be no reason why there
should be a deviation in this litigation especially so when again, as noted in the
Comment, respect for such a mandate has been accorded in previous opinions. 3 2
With due respect, we should not now deviate from this doctrine. TaDSHC
Three. The constitution puts the employee on equal footing with his employer. 3 3 As
between an employee, usually poor and unlettered, and the employer, who has resources
to secure able legal advice, the law has reason to demand from the latter stricter
compliance. For, social justice in these cases is not equality but protection. 3 4 As Mr. Chief
Justice Fernando stressed in Victorias Milling Co., Inc. v. Workmen's Compensation
Commission 3 5 —
To repeat, courts should ever be on the alert lest through inadvertence or
faulty analysis the expected opposition from management be appraised much
more favorably than warranted. The unfortunate result would be that both the
social justice concept and the complementary constitutional command of
protection to labor would be disregarded and set at naught. There is no higher
duty cast on the judiciary than to guard against such an undesirable possibility,
fraught as it is with consequences truly to be deplored. 3 6
In a similar vein, Mr. Chief Justice Ramon C. Aquino, in his Concurring Opinion in
Allied Investigation Bureau v. Hon. Inciong , 3 7 opined that "social justice in the case of the
laborers means compassionate justice or an implementation of the policy that those who
have less in life should have more in law." 3 8 The Constitution helps labor for a simple
reason. Employees are overmatched in their struggle against their employers. Their playing
field is not level.
Four. This Court has long extended constitutional due process in labor cases
involving private action. Prior to Wenphil, the rule etched in stone is that an employer can
validly dismiss an erring employee only after giving him notice and hearing. Thus, decades
ago, this Court in Batangas Laguna Tayabas Bus Co. v. Court of Appeals 3 9 ruled that "the
failure of petitioner to give the private respondent the bene t of a hearing before he was
dismissed constitutes an infringement on his constitutional right to due process of law." 4 0
In De Leon v. National Labor Relations Commission 4 1 where an employee was dismissed
without notice, it was held that "[t]here is in this case a clear denial of due process, a
constitutional right which must be safeguarded at all times especially when what is at
stake is petitioner's position as his only means of livelihood." 4 2 I n Reyes v. Philippine
Duplicators, Inc. , 4 3 where petitioner Reyes was dismissed from the service in 1977
without any investigation or hearing, this Court found that the dismissal was arbitrary as
Reyes was denied due process. Hence, even the non-compliance with Sections 2 and 3,
Rule XIV, Book V of the Implementing Rules and Regulations of the Labor Code pursuant to
the amendments of P.D. No. 850 which was issued in 1975, requiring a prior clearance
from the Department of Labor to terminate the services of an employee, rendered the
termination illegal and nullified the dismissal of the employee. 4 4
In August 1981, B.P. Blg. 130 did away with the clearance to terminate employment.
Prior notice and formal investigation were however instead imposed as conditions sine
qua non before termination may be effected. 4 5 Thus, the inviolability of prior notice and
hearing before an employee could be dismissed was iterated and reiterated. In Miguel v.
National Labor Relations Commission, 4 6 where the employee was simply handed his
walking papers without any explanation, this Court held that the dismissal was
unwarranted and ruled that "[t]he due process requirement is not a mere formality that may
be dispensed with at will. Its disregard is a matter of serious concern since it constitutes a
safeguard of the highest order in response to man's innate sense of justice." 4 7 Kwikway
Engineering Works v. National Labor Relations Commission , 4 8 explained that "[t]he twin
requirements of notice and hearing constitute essential elements of due process in cases
of employee dismissal: the requirement of notice is intended to inform the employee
concerned of the employer's intent to dismiss and the reason for the proposed dismissal;
upon the other hand, the requirement of hearing affords the employee an opportunity to
answer his employer's charges against him accordingly to defend himself therefrom
before dismissal is effected. Neither of these two requirements can be dispensed with
without running afoul of the due process requirement of the 1987 Constitution." 4 9 In a
stream of ceaseless cases, we adhered to the doctrine that failure to comply with the two-
notice rule makes the dismissal illegal and reinstatement or payment of separation pay in
order. 5 0 In ne, " re the employee, and let him explain later" violates this hallowed rules. 5 1
It has always been this way — until Wenphil.
This is not to hold that a trial-type proceeding is required to be conducted by
employers. 5 2 Hearings before the employers prior to the dismissal are in the nature of and
akin to administrative due process which is free from the rigidity of certain procedural
requirements. Mr. Justice Laurel way back in 1940 enumerated the cardinal rights of
parties in administrative proceedings in the landmark case of Ang Tibay v. Court of
Industrial Relations 5 3 —
1. the right to a hearing which includes the right to present one's case and
submit evidence in support thereof;
2. the tribunal must consider the evidence presented;
3. the decision must have something to support itself;

4. the evidence must be substantial which means such evidence as a
reasonable mind might accept as adequate to support a conclusion;
5. 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;
6. 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;
7. the board or body should, in all controversial questions, render its
decision in such manner that the parties to the proceeding can know the issues
involved and the reasons for the decision rendered. 5 4
The posture that the constitutional due process requirement limits government
action alone and does not apply to private action is already passé. Thus, even in the United
States, the application of due process to private conduct has gained approval and has
become a settled norm. For, as expressed by Professor Laurence H. Tribe , a noted
constitutionalist —
But particularly where ostensibly "private" power is the primary source of
the coercion and violence that oppressed individuals and groups experience, it is
hard to accept with equanimity a rigid legal distinction between state and society.
The pervasive system of racial apartheid which existed in the South for a century
after the Civil War, for example, thrived only because of the resonance of society
and politics . . . the close t between private terror, public discrimination, and
political exclusion. So too, where it is the state's persistent inaction in the face of
patterns of deprivation for which the state and society seem to many to bear
collective responsibility, the premise that only identi able state "action" may be
called constitutional account is deeply troubling. 5 5
Accordingly, modern notions of violations of due process which may fairly be

attributed to the State have expanded considerably in recent decades. Seemingly private
conducts have arguably been treated as adequate state actions. 5 6 Individual invasions of
individual rights in certain instances have become proper subjects of constitutional
restraints. 5 7 In ne, as Mr. Justice Felix Frankfurter put it in Joint Anti-Fascist Refugee
Committee v. McGrath , 5 8 "'[d]ue process,' unlike some legal rules, is not a technical
conception with a xed content unrelated to time, place, and circumstances . . . Due
process is not a mechanical instrument. It is not a yardstick. It is a delicate process of
adjustment inescapably involving the exercise of judgment by those whom the
Constitution entrusted with the unfolding of the process." 5 9 Beyond argument, the
Constitution was designed to embody and celebrate values and to inculcate proper
acceptance of them, as much as to compel governments to abide by them. 6 0
This is as it ought to be for as well observed by Dr. David C. Korten, Founder and
President of the People — Centered Development Forum, ". . . [c]orporations have emerged
as the dominant governance institutions on the planet, with the largest among them
reaching into virtually every country of the world and exceeding most governments in size
and power. Increasingly, it is the corporate interest more than the human interest that
de nes the policy agendas of states and international bodies . . ." 6 1 Assailing the threat to
liberty coming from these new economic rulers, President Franklin Delano Roosevelt said:
"The royalists of the economic order have conceded that political freedom was the
business of government but they have maintained that economic slavery was nobody's
business. They granted that the government could protect the citizen in his right to vote,
but they denied that the government could do anything to protect the citizen in his right to
work and his right to live. " 6 2 To be sure, some of the unlamented decisions of the
Supreme Court of the United States were those which allowed private corporations to rim
roughshod over the rights of workers. Observed Korten again: 6 3
A conservative court system that was consistently responsive to the
appeals and arguments of corporate lawyers steadily chipped away at the
restraints a wary citizenry had carefully placed on corporate powers. Step-by-step,
the court system put in place new precedents that made the protection of
corporations and corporate property a centerpiece of constitutional law. These
precedents eliminated the use of juries to decide fault and assess damages in
cases involving corporate-caused harm and took away the right of states to
oversee corporate rates of return and prices. Judges sympathetic to corporate
interests ruled that workers were responsible for causing their own injuries on the
job, limited the liability of corporations for damages they might cause, and
declared wage and hours laws unconstitutional. They interpreted the common
good to mean maximum production — no matter what was produced or who it
harmed. TDcHCa
The choice that confronts us is which right to uphold: the right to work of an
underprivileged natural person or the right to property of an overprivileged arti cial
person. In truth, there is but one choice to make for it is highly anomalous to bestow
better rights to an artificial person than a natural person. 6 4
Certainly, these are neither "novel legal ideas" nor " nouvelle vague theories" but
careful directions brought about by the evolution of laws and the due process clause
which saw the need to rightfully protect the underprivileged as a result of ominous
occurrences over the years.. These, on the contrary, are persuasive axioms which prevail in
other countries and should find application in our jurisdiction.
Indeed, it strains my imagination to see how the application of the constitutional due
process clause to cases of illegal dismissal can "open the oodgates to, and the docket . .
. swamped with, litigations of the scurrilous sort" and "give rise to all absurd constitutional
claims." Su ce it to say that equating an excommunicated Catholic demanding
reinstatement, or a celebrity endorser suing to be able to sing for another brand, or even an
employee preventing his employer to read his out going e-mail with a dismissed employee
exerting his constitutional right to security of tenure and due process of clause is too off-
line. Withal, as adverted to, we have long extended constitutional due process and security
of tenure in labor cases involving private action and I have yet to see "litigations of the
scurrilous sort" being entertained by the courts.
Five. An employee who is denied procedural doe process is entitled to

reinstatement. Nothing less. This Court, in carrying out the constitutional directive of the
1973 Constitution requiring the State to "assure the rights of workers to . . . security of
tenure . . ." 6 5 has quite consistently nulli ed, simply on constitutional grounds, dismissals
in violation of procedural due process, notwithstanding the absence of an express
provision of any statute. The Court has done the same under the 1987 Constitution which
admittedly has given more protection to labor than any of our previous charters — through
a four-paragraph section in the Article on Social Justice and Human Rights which details
the protective mantle accorded to labor alone. 6 6 Thus, Art. XIII, Sec. 3 of the 1987
Constitution decrees that "[t]he State shall afford full protection to labor . . . and promote
full employment . . . (All workers) shall be entitled to security of tenure . . ." Art. XII, Sec. 18
of the 1987 Constitution mandates that "[t]he State a rms labor as a primary social
economic force. It shall protect the rights of workers and promote their welfare." All told,
this Court for almost three decades has set aside, on constitutional grounds, dismissals in
violation of procedural due process — until Wenphil came along , with the interests of the
employer tailing and suddenly enjoying preference. To uphold Wenphil, Serrano, and now
Agabon, is to dilute the protection to those who need it most despite the constitutional
mandate which in the language of Mr. Justice Cardozo speaks with "a reverberating clang
that drowns all weaker sounds." With due respect, the grant of indemnity to the dismissed
employee "as both penalty and disincentive" as the majority provides in the instant case
does not square with the protection accorded by the Constitution to labor. There is only
one main relief in cases of dismissal without notice and hearing — reinstatement.
Six. Compliance with procedural due process is not a burden on employers. There is
no valid reason why employers should have any di culty according procedural due
process to their employees. The rules are fairly simple. Section 2, Rule XXIII (Termination
of Employment), Book V (Labor Relations), Omnibus Rules Implementing the Labor Code,
provides —
Section 2. Standards of due process; requirements of notice. — In all cases
of termination of employment, the following standards of due process shall be
substantially observed:
I. For termination of employment based on just causes as de ned 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.
II. For termination of employment as based on authorized causes de ned
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 O ce of the Department at least thirty (30) days before the
effectivity of the termination, specifying the ground or grounds for termination.
III. If the termination is brought about by the completion of the contract or
phase thereof, no prior notice is required. If the termination is brought about by
the failure of an employee to meet the standards of the employer in the case of
probationary employment, it shall be su cient that a written notice is served the
employee within a reasonable time from the effective date of termination.
Similarly, Section 2, Rule I (Termination of Employment and Retirement), Book VI

(Post-Employment) of the same Omnibus Rules, which covers all establishments and
undertakings, whether for pro t or not, except the Government, requires the same notice
and hearing.
In sum, in cases of dismissal based on just causes (Article 282, Labor Code), the
employer must give two (2) simple notices: (1) notice before dismissal to apprise the
employee being dismissed 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. In cases of dismissal for authorized causes (Article 283, Labor Code), the employer
must serve an uncomplicated written notice on the worker and on the Department of Labor
and Employment at least one (1) month before the intended closure of the establishment
or reduction of personnel. The law requires nothing more. cEAaIS
It is distressing to say the least why employers should be exempted from observing
this simple duty. In ne, to give to labor what is due them is far from authorizing
oppression nor destruction of the employer as some views would have. The employer
cannot simply abuse the conduct of his business to the prejudice of an employee. The
persistence in violating the rights of the workers is the employer's own doing and self-
destruction which may be let alone.
The right of an employer to dismiss an employee differs from and should not be
confused with the manner in which such right is exercised. While the management has
certain privileges, the exercise of such privileges must be made without abuse of
discretion, Thus, Dole Philippines v. National Labor Relations Commission, 6 7 recognized as
a management prerogative the determination of the need for the phasing out of a
department as a labor and cost saving device. In the same manner, Remereco Garments
Manufacturing v. Minister of Labor and Employment 6 8 conceded that it is the sole
prerogative of management to dismiss or lay-off an employee. But in these two cases, and
in so many other cases, this Court cautioned that the exercise of such prerogatives must
be made without abuse of discretion for what is at stake is not only the employee's
position but also their means of livelihood. 6 9 It must not be oppressive and abusive since
it affects one's person and property. It is the right of every workingman to assure himself
and his family a life worthy of human dignity. Consequently, in dismissing an employee
based on authorized cause or for just cause, as the case may be, the employer must, at the
very minimum, comply with procedural due process. Failure to observe due process,
particularly the prior notice requirement, rightly deserves stiff sanctions, if not
condemnation, and not a mere slap on the wrist, as the majority now propounds. As I said
in Serrano —
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 di cult 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.

xxx xxx xxx
In ne, if the employer's right to dismiss an employee is forfeited for his

was failure to comply with this simple, reasonable duty to pre-notify his employee,
he has nothing to blame but himself. 7 0
Verily, dismissal without due process debases human dignity. It is, therefore,
incumbent upon the employer to conduct a formal investigation and inform the employee
of the speci c charges against him . Most certainly, the resolution of extreme cases, e.g.,
where the employee threatens the life of the employer, are the exceptions rather than the
ordinary and usual cases. As such, rules governing them should not be used as the general
rule. Rather, employers should be reminded that under our system of government, even the
most hardened criminals are given their day in court. 7 1 Employees are not entitled to
anything less.
Seven. In the hierarchy of rights of an employees, the right to security of tenure is
high, if not the highest. Its paramount value is recognized and guaranteed under our new
Constitution. 7 2 Consequently, the rst paragraph of Article XIII, Section 3 of the 1987
Constitution, extends the protective mantle of the Constitution to all of labor including the
promotion of full employment. The second paragraph speci es the guaranteed right to
security of tenure. All other rights, e.g ., the right to collective bargaining and negotiations,
the right to peaceful concerted activities, the right to strike and form unions, and the right
to due process, merely complement the right to job security. All these complementary
rights are meaningless to an unemployed Juan De la Cruz. Thus, we held in Rance v.
National Labor Relations Commission, 7 3 "[i]t is the policy of the State to assure the right of
workers to 'security of tenure.' The guarantee is an act of social justice. When a person has
no property, his job may possibly be his only possession or means of livelihood, Therefore
he should be protected against any arbitrary deprivation of his job." 7 4 Almira v. B.F.
Goodrich Philippines, Inc. 7 5 is worth quoting —
It would imply at the very least that where a penalty less punitive would
su ce, whatever missteps may be committed by labor ought not to be visited
with a consequence so severe. It is not only because of the law's concern for the
workingman. There is, in addition, his family to consider. Unemployment brings
untold hardships and sorrows on those dependent on the wage-earner. The
misery and pain attendant on the loss of jobs then could be avoided if there be
acceptance of the view that under all the circumstances of this case, petitioners
should not be deprived of their means of livelihood. Nor is this to condone what
had been done by them. For all this while, since private respondent considered
them separated from the service, they had not been paid. From the strictly
juridical standpoint, it cannot be too strongly stressed, to follow Davis in his
masterly work, Discretionary Justice, that where a decision may be made to rest
[on] an informed judgment rather than rigid rules, all the equities of the case must
be accorded their due weight. Finally, labor law determinations, to quote from
Bultmann, should be not only secundum rationem but also secundum caritatem.
76
Eight. Workers need work more than anything else. For a wageworker, a job is
important. While there is work, there is food on the table. Take away work, replace it with a
meager lump sum, and the food will disappear. Through work, the breadwinner satis es
his basic needs and those of his family. He also provides himself with a means to express
himself, transform, develop and perfect his skills and talents. Through work, he interacts
and establishes relations with others. Work is a de ning feature of human existence . It is
the means of sustaining life and meeting essential needs. It is also an activity through
which individuals a rm their own identity, both to themselves and to those around them. It
is crucial to individual choice, to the welfare of families and to the stability of societies. 7 7
Every man has the right to work, to a chance to develop his qualities and his personality in
the exercise of his profession, to equitable remuneration which will enable him and his
family to lead a worthy life on material, social, cultural and spiritual level. 7 8 Shylock said it
well: "You take my life when you do take the means whereby I live." 7 9
Nine. To simply allow payment of nominal damages for violation of employee's right
to due process is to give undue advantage to employers. One does not need to have a
stratospheric mind to know that the Constitution gave greater rights to employees over
their employers. The intent is to equalize the ght of the underprivileged against the
overprivileged. We cannot allow the employers to marginalize the right of the workingman
to due process for a few pesos without mocking the protection accorded by the
Constitution to the powerless. The deprivation of the right to security of tenure and due
process is beyond monetary valuation. In ne, to lengthen the longevity of Serrano is to
sharpen the dangerous divide between the haves and have-nots in our society. But Agabon
is not merely extending Serrano. Agabon is far worse than Serrano. TDaAHS
I n Serrano, the dismissed employee was awarded backwages from the time his
employment was terminated until it was determined that the termination was for an
authorized cause. Using the facts of the instant case as an illustration, petitioner-
employees who were dismissed in February 1999 stand to get roughly 63 months of
backwages under Serrano, i.e., the number of months from the time they were dismissed in
February 1999 until November 2004 when it was determined that the termination was for
just cause. In Agabon, however, the dismissed employee is merely being granted an
indemnity equivalent to Thirty Thousand Pesos. This is exactly Wenphil more than a
decade later, with the cost of money and in ation factored in. Indeed, the sorry plight of
the workers has just been worsened, if not preserved, by the new majority ruling.
Just a word more. In Serrano, I pointed out:
. . . The dilution of the rule has been abased 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 di cult to understand. It is the linchpin of an employees right
against an illegal dismissal. The notice tells him the cause of [the] 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 ne, the prior notice requirement and the hearing before the employer
gives an employee a distinct, different and effective rst level of remedy to
protect his job.
xxx xxx xxx
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 is to stoop down to reach the poor. 8 0
In these times when our lowly workers can hardly maintain body and soul together
due to their meager means, I nd it hard to believe that the majority in Wenphil, in Serrano,
and now in the instant case Agabon, persists in weakening our employee's right to job
security. The stance simply offends a basic principle of justice so entrenched in our
tradition and etched in our conscience. An employee may not have a torrens title to his job
but it is not too much to require that before he is dismissed by his employer, he should be
given a simple notice of the cause of his dismissal and a summary hearing to present his
side. All our constitutional and statutory precepts on social justice and the protection of
labor will go to naught if we perpetuate our ruling that a dismissal without the required
prior notice is valid and if we just penalize with the payment of pennies violations of the
employee's right to due process. Without doubt, Wenphil and Serranohave lengthened the
queue of the unemployed. Agabon will stretch it out even more.
In the case at bar, where petitioners Jenny Agabon and Virgilio Agabon were
dismissed from the service for abandonment of work without the due process
requirements of two (2) notices and hearing, I submit that the dismissals should be
nulli ed and set aside, and petitioners immediately reinstated without loss of seniority
rights and other privileges. This Court should protect labor and it should walk the talk.
Accordingly, I vote for the immediate REINSTATEMENT of petitioners Jenny M.
Agabon and Virgilio C. Agabon, without loss of their seniority rights and other privileges
and with full backwages, and the REVERSION to the pre-Wenphil Doctrine in resolving
future labor cases.
PANGANIBAN , J ., dissenting :
The core issue of the present case concerns the legal effect of and the
corresponding sanction for the failure of an employer to give an employee the pre-
dismissal written notice of termination and opportunity to be heard required under the
Labor Code and its implementing Rules.
In Serrano v. NLRC , 1 the Court held that such termination of employment should be
considered "ineffectual" and, as such, sanctioned with payment of full back wages plus —
in case the dismissal was for an authorized cause — separation pay in accordance with
Article 283 2 of the Labor Code. In addition, nominal and moral damages may also be
awarded, if warranted by the evidence.
In the case before us now, the employment of petitioners was terminated on the
ground of abandonment of their work. However, the employer failed to accord them their
right to prior notice and hearing, required under Article 277 3 of the Labor Code and
Section 2 4 of Rule XXIII of the 1999 Implementing Rules and Regulations. The majority
holds that for violation of the employee's right to statutory due process, an indemnity in
the amount of P30,000 should be awarded to the petitioners as nominal damages under
the Civil Code. According to the majority, this award should serve to discourage employers
from violating the statutory due process rights of their employees.
With due respect, I disagree with this ruling, because it aggravates the rights of our
work force, and diminishes respect for due process.
Jurisprudence on Right to
Notice and Hearing
Prior to the promulgation in 1989 of Wenphil v. NLRC , 5 the Court held that —
whether for a valid cause or not — dismissing employees without giving them prior notice
and the opportunity to be heard was illegal; and that, as a consequence, they were entitled
to reinstatement plus full back wages. Wenphil abandoned this policy and ruled that if the
dismissal was for a just or an authorized cause, but without due process, the termination
was valid; but that the employer should be sanctioned, for violating the employee's right to
notice and hearing, through the payment of indemnity to each dismissed employee in an
amount ranging from P1,000 to P10,000. DHSEcI
In 2000, Serrano 6 held that such dismissals for just or authorized causes but
without due process were merely ineffectual (not illegal). Nevertheless, the employee was
entitled to full back wages plus nominal and moral damages, if warranted by the evidence;
and, in case the dismissal was for an authorized cause, separation pay in accordance with
Article 283 of the Labor Code.
This time, in the present case, the majority is incredibly reverting to Wenphil in
upholding the validity of employment terminations without due process.
A Setback on
Labor's Rights
With due respect, I strongly oppose the Court's inexplicable turnaround. This ruling
is a setback on labor's rights. Thus, I reiterate my Dissent 7 in Serrano. In that case, I was
grateful enough that the Court had decided to reexamine and modify the ten-year Wenphil
doctrine. In the process, it had at least increased the monetary award that should go to the
dismissed employee — from a nominal sum in the concept of "indemnity or damages" to
"full back wages."
I respectfully submit that nothing has transpired in the past four and a half years
since Serrano was issued, that justi es further diminution of whatever constitutional rights
to due process and security of tenure our workers still enjoy. On the contrary, nothing is
more evident than the inescapable fact that their empowerment makes them better
partners in the country's development and global competence. Any further trampling of
their rights is undeserved.
As explained in my Dissenting Opinion in Serrano, the notice requirement nds basis

not only in the Labor Code but, more important, in the due process clause of the
Constitution.
Consequently, when an 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 (or separation pay), much less merely "indemnity of one month
salary for every year of service." It is jurisprudentially settled that when procedural due
process is violated, the proceedings — in this case, the dismissal — shall be voided, and the
parties returned to their status quo ante; that is, the employees should be given back their
old jobs and paid all benefits as if they have never been dismissed.
In ruling that the dismissal should be deemed legal, the majority has virtually
rendered nugatory the employees' right to due process as mandated by law and the
Constitution. It has implicitly allowed the employer simply to ignore such right and just pay
the employee.
I respectfully submit that illegal dismissal results not only from the absence of a
legal cause, in accordance with Articles 282 8 to 284 9 of the Labor Code, but likewise
from the failure to observe due process. There are many labor and other cases in which
acts violative of due process have unequivocally been declared illegal by the Court. They
range from similar cases of employment termination 1 0 to criminal prosecutions 1 1 to
administrative cases 1 2 and election cases 1 3 as well. I made a summary of these
Decisions in my aforesaid Serrano Opinion, which I shall no longer repeat here.
Violation of Due Process
Amounts to Illegality of Proceedings
In all these cases, the Court has uniformly ruled that the denial of the fundamental
right to due process resulted in the illegality of the proceedings. Thus, the deprived
individuals should be brought back to their 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, 1 4 to which it is constitutionally mandated to afford full protection.
1 5 Yet, the Court refuses to declare the illegality of dismissals made without due process. I
insist that we should denounce such dismissals as null and void and grant our workers
these proper reliefs: (1) a declaration that the termination or dismissal is illegal and
unconstitutional; and (2) the reinstatement of the employee, without loss of seniority
rights and accruing benefits plus full back wages.
Exception to Due
Process Sanctions
The only exception to the above sanctions would be a case analogous to Wenphil,
one clearly showing the impracticality and the futility of observing the procedure laid down
by law in terminating employment. To recall, the employee involved in Wenphil had
exhibited a violent temper and caused trouble even in the presence of the restaurant's
customers. 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. Under the circumstances, instant action was necessary to preserve
order and discipline, as well as to safeguard the customers' con dence in the employer's
business — a fastfood chain catering to the general public, towards whom courtesy was a
prized virtue.
In most of the succeeding cases, though — including the present one before us in
which petitioners had been dismissed without prior notice and hearing — there were ample
opportunities for the employers to observe the requisites of due process. There were no
exigencies that called for immediate response.
For the infringement of the fundamental right to due process, I believe that the price
the Court once again sets is too insigni cant and too niggardly at such a late hour. I iterate
that imposing a stiffer sanction is the only way to emphasize to employers the extreme
importance of the right to due process. 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" as was done in Serrano), is to allow the rich and powerful to
virtually purchase and thereby sti e a constitutional right granted to the poor and
marginalized. TAIEcS
Respect for Due Process

Should be Maintained
The ponencia concedes that the worker's right to due process is both statutory and
constitutional in nature. Yet, it still gives it little regard and value.
May I just recall that in Wallem Maritime Services v. NLRC , 1 6 the Court said that "
[o]ne's employment, profession, trade or calling is a property right within the protection of
the constitutional guaranty of due process of law." An objective reading of the Bill of Rights
clearly shows that the due process protection is not limited to government action alone.
The Constitution does not say that the right cannot be claimed against private individuals
and entities. 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.
True, traditional doctrine holds that constitutional rights may be invoked only
against the State, which in the past was the only entity 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 this traditional doctrine
should be modi ed to enable the judiciary to cope with new paradigms and to continue
protecting the people from new forms of abuses.
In the nal analysis , what is involved here is not simply the amount of monetary
award — whether insigni cant or substantial; whether termed as indemnity, penalty,
separation pay or full back wages. Neither is the subject here merely a matter of respect
for workers' rights or adequate protection of labor. The bottom line is the constitutionally
granted right to due process, which is the very essence of justice itself. Where the rule of
law is the bedrock of our free society, justice is its very lifeblood. A denial of due process
is thus no less than a denial of justice itself.
Summary
In conclusion, I believe that even if there was just or authorized cause for termination
of employment, but due process was not afforded the employee, the dismissal
proceedings must be declared null and void. Consequently, the employee must be
reinstated and given full back wages and accruing bene ts. Depending on the facts of
each case, damages as provided under applicable articles of the Civil Code may
additionally be awarded.
An exception may be entertained if the employer could 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 was caught in agrante delicto. Under such
circumstances, dismissal would not be illegal, and no award may properly be granted.
Nevertheless, as a measure of compassion in this speci c instance, the employee may be
given a nominal sum depending on the circumstances, pursuant to Article 2221 of the Civil
Code.
WHEREFORE, I vote to GRANT the Petition and ORDER the petitioners'
REINSTATEMENT without loss of seniority rights and other privileges, plus FULL BACK
WAGES from the date of termination until actual reinstatement.
TINGA , J.:
I concur in the result, the nal disposition of the petition being correct. There is no
denying the importance of the Court's ruling today, which should be considered as
de nitive as to the effect of the failure to render the notice and hearing required under the
Labor Code when an employee is being dismissed for just causes, as de ned under the
same law. The Court emphatically rea rms the rule that dismissals for just cause are not
invalidated due to the failure of the employer to observe the proper notice and hearing
requirements under the Labor Code. At the same time, The Decision likewise establishes
that the Civil Code provisions on damages serve as the proper framework for the
appropriate relief to the employee dismissed for just cause if the notice-hearing
requirement is not met. Serrano v. NLRC , 1 insofar as it is controlling in dismissals for
unauthorized causes, is no longer the controlling precedent. Any and all previous rulings
and statements of the Court inconsistent with these determinations are now deemed
inoperative.
My views on the questions raised in this petition are comprehensive, if I may so in all
modesty. I offer this opinion to discuss the reasoning behind my conclusions, pertaining
as they do to questions of fundamental importance.
Prologue
The factual backdrop of the present Petition for Review is not novel. Petitioners
claim that they were illegally dismissed by the respondents, who allege in turn that
petitioners had actually abandoned their employment. There is little di culty in upholding
the ndings of the NRLC and the Court of Appeals that petitioners are guilty of
abandonment, one of the just causes for termination under the Labor Code. Yet, the
records also show that the employer was remiss in not giving the notice required by the
Labor Code; hence, the resultant controversy as to the legal effect of such failure vis-à-vis
the warranted dismissal.
Ostensibly, the matter has been settled by our decision in Serrano, 2 wherein the
Court ruled that the failure to properly observe the notice requirement did not render the
dismissal, whether for just or authorized causes, null and void, for such violation was not a
denial of the constitutional right to due process, and that the measure of appropriate
damages in such cases ought to be the amount of wages the employee should have
received were it not for the termination of his employment without prior notice. 3 Still, the
Court has, for good reason, opted to reexamine the so-called Serrano doctrine through the
present petition THSaEC
Antecedent Facts
Respondent Riviera Home Improvements, Inc (Riviera Home) is engaged in the
manufacture and installation of gypsum board and cornice. In January of 1992, the
Agabons were hired in January of 1992 as cornice installers by Riviera Home. According to
their personnel le with Riviera Home, the Agabon given address was 3RDS Tailoring, E.
Rodriguez Ave., Moonwalk Subdivision, P-II Parañaque City, Metro Manila. 4
It is not disputed that sometime around February 1999, the Agabons stopped
rendering services for Riviera Home. The Agabons allege that beginning on 23 February
1999, they stopped receiving assignments from Riviera Home. 5 When they demanded an
explanation, the manager of Riviera Homes, Marivic Ventura, informed them that they
would be hired again, but on a "pakyaw" (piece-work) basis. When the Agabons spurned
this proposal, Riviera Homes refused to continue their employment under the original
terms and agreement. 6 Taking affront, the Agabons led a complaint for illegal dismissal
with the National Labor Relations Commission ("NLRC").
Riviera Homes adverts to a different version of events leading to the ling of the
complaint for illegal dismissal. It alleged that in the early quarter of 1999, the Agabons
stopped reporting for work with Riviera. Two separate letters dated 10 March 1999, were
sent to the Agabons at the address indicated in their personnel le. In these notices, the
Agabons were directed to report for work immediately. 7 However, these notices were
returned unserved with the notation "RTS Moved." Then, in June of 1999, Virgilio Agabon
informed Riviera Homes by telephone that he and Jenny Agabon were ready to return to
work for Riviera Homes, on the condition that their wages be rst adjusted. On 18 June
1999, the Agabons went to Riviera Homes, and in a meeting with management, requested
a wage increase of up to Two Hundred Eighty Pesos (P280.00) a day. When no a rmative
response was offered by Riviera Homes, the Agabons initiated the complaint before the
NLRC. 8
In their Position Paper, the Agabons likewise alleged that they were required to work
even on holidays and rest days, but were never paid the legal holiday pay or the premium
pay for holiday or rest day. They also asserted that they were denied Service Incentive
Leave pay, and that Virgilio Agabon was not given his thirteenth (13th) month pay for the
year 1998. 9
After due deliberation, Labor Arbiter Daisy G. Cauton-Barcelona rendered a Decision
dated 28 December 1999, nding the termination of the Agabons illegal, and ordering
Riviera Homes to pay backwages in the sum of Fifty Six Thousand Two Hundred Thirty One
Pesos and Ninety Three Centavos (P56,231.93) each. The Labor Arbiter likewise ordered,
in lieu of reinstatement, the payment of separation pay of one (1) month pay for every year
of service from date of hiring up to 29 November 1999, as well as the payment of holiday
pay, service incentive leave pay, and premium pay for holiday and restday, plus thirteenth
(13th) month differential to Virgilio Agabon. 1 0
In so ruling, the Labor Arbiter declared that Riviera Homes was unable to
satisfactorily refute the Agabons' claim that they were no longer given work to do after 23
February 1999 and that their rehiring was only on "pakyaw" basis. The Labor Arbiter also
held that Riviera Homes failed to comply with the notice requirement, noting that Riviera
Homes well knew of the change of address of the Agabons, considering that the
identi cation cards it issued stated a different address from that on the personnel le. 1 1
The Labor Arbiter asserted the principle that in all termination cases, strict compliance by
the employer with the demands of procedural and substantive due process is a condition
sine qua non for the same to be declared valid. 1 2
On appeal, the NLRC Second Division set aside the Labor Arbiter's Decision and
ordered the dismissal of the complaint for lack of merit. 1 3 The NLRC held that the
Agabons were not able to refute the assertion that for the payroll period ending on 15
February 1999, Virgilio and Jenny Agabon worked for only two and one-half (2 1/2) and
three (3) days, respectively. It disputed the earlier nding that Riviera Homes had known of
the change in address, noting that the address indicated in the identi cation cards was not
the Agabons, but that of the persons who should be noti ed in case of emergency
concerning the employee. 1 4 Thus, proper service of the notice was deemed to have been
accomplished. Further, the notices evinced good reason to believe that the Agabons had
not been dismissed, but had instead abandoned their jobs by refusing to report for work.
In support of its conclusion that the Agabons had abandoned their work, the NLRC
also observed that the Agabons did not seek reinstatement, but only separation pay. While
the choice of relief was premised by the Agabons on their purported strained relations
with Riviera Homes, the NLRC pointed out that such claim was amply belied by the fact
that the Agabons had actually sought a conference with Riviera Homes in June of 1999.
The NLRC likewise found that the failure of the Labor Arbiter to justify the award of
extraneous money claims, such as holiday and service incentive leave pay, con rmed that
there was no proof to justify such claims.
A Petition for Certiorari was promptly led with the Court of Appeals by the
Agabons, imputing grave abuse of discretion on the part of the NLRC in dismissing their
complaint for illegal dismissal. In a Decision 1 5 dated 23 January 2003, the Court of
Appeals a rmed the nding that the Agabons had abandoned their employment. It noted
that the two elements constituting abandonment had been established, to wit: the failure
to report for work or absence without valid justi able reason, and; a clear intention to
sever the employer-employee relationship. The intent to sever the employer-employee
relationship was buttressed by the Agabon's choice to seek not reinstatement, but
separation pay. The Court of Appeals likewise found that the service of the notices were
valid, as the Agabons did not notify Riviera Homes of their change of address, and thus the
failure to return to work despite notice amounted to abandonment of work.
However, the Court of Appeals reversed the NLRC as regards the denial of the
claims for holiday pay, service incentive leave pay, and the balance of Virgilio Agabon's
thirteenth (13th) month pay. It ruled that the failure to adduce proof in support thereof was
not fatal and that the burden of proving that such bene ts had already been paid rested on
Riviera Homes. 1 6 Given that Riviera Homes failed to present proof of payment to the
Agabons of their holiday pay and service incentive leave pay for the years 1996, 1997 and
1998, the Court of Appeals chose to believe that such bene ts had not actually been
received by the employees. It also ruled that the apparent deductions made by Riviera
Homes on the thirteenth (13th) month pay of Virgilio Agabon violated Section 10 of the
Rules and Regulations Implementing Presidential Decree No. 851. 1 7 Accordingly, Riviera
Homes was ordered to pay the Agabons holiday pay for four (4) regular holidays in 1996,
1997 and 1998, as well as their service incentive leave pay for said years, and the balance
of Virgilio Agabon's thirteenth (13th) month pay for 1998 in the amount of Two Thousand
One Hundred Fifty Pesos (P2,150.00). 1 8
In their Petition for Review, the Agabons claim that they had been illegally dismissed,
reasserting their version of events, thus: (1) that they had not been given new assignments
since 23 February 1999; (2) that they were told that they would only be re-hired on a
"pakyaw" basis, and; (3) that Riviera Homes had knowingly sent the notices to their old
address despite its knowledge of their change of address as indicated in the identi cation
cards. 1 9 Further, the Agabons note that only one notice was sent to each of them, in
violation of the rule that the employer must furnish two written notices before termination
— the rst to apprise the employee of the cause for which dismissal is sought, and the
second to notify the employee of the decision of dismissal. 2 0 The Agabons likewise
maintain that they did not seek reinstatement owing to the strained relations between
them and Riviera Homes. TCDcSE
The Agabons present to this Court only one issue, i.e.: whether or not they were
illegally dismissed from their employment. 2 1 There are several dimensions though to this
issue which warrant full consideration.
The Abandonment Dimension
Review of Factual Finding of Abandonment
As the Decision points out, abandonment is characterized by the failure to report for
work or absence without valid or justi able reason, and a clear intention to sever the
employer-employee relationship. The question of whether or not an employee has
abandoned employment is essentially a factual issue. 2 2 The NLRC and the Court of
Appeals, both appropriate triers of fact, concluded that the Agabons had actually
abandoned their employment, thus there is little need for deep inquiry into the correctness
of this factual nding. There is no doubt that the Agabons stopped reporting for work
sometime in February of 1999. And there is no evidence to support their assertion that
such absence was due to the deliberate failure of Riviera Homes to give them work. There
is also the fact, as noted by the NLRC and the Court of Appeals, that the Agabons did not
pray for reinstatement, but only for separation pay and money claims. 2 3 This failure
indicates their disinterest in maintaining the employer-employee relationship and their
unabated avowed intent to sever it. Their excuse that strained relations between them and
Riviera Homes rendered reinstatement no longer feasible was hardly given credence by the
NLRC and the Court of Appeals. 2 4
The contrary conclusion arrived at by the Labor Arbiter as regards abandonment is

of little bearing to the case. All that the Labor Arbiter said on that point was that Riviera
Homes was not able to refute the Agabons' claim that they were terminated on 23
February 1999. 2 5 The Labor Arbiter did not explain why or how such nding was reached.
Being bereft of reasoning, the conclusion deserves scant consideration.
Compliance with Notice Requirement
At the same time, both the NLRC and the Court of Appeals failed to consider the
apparent fact that the rules governing notice of termination were not complied with by
Riviera Homes. Section 2, Book V, Rule XXIII of the Omnibus Rules Implementing the Labor
Code (Implementing Rules) speci cally provides that for termination of employment
based on just causes as de ned in Article 282, there must be: (1) written notice served on
the employee specifying the grounds for termination and giving employee reasonable
opportunity to explain his/her side; (2) a hearing or conference wherein the employee, with
the assistance of counsel if so desired, is given opportunity to respond to the charge,
present his evidence or rebut evidence presented against him/her; and (3) written notice of
termination served on the employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify termination.
At the same time, Section 2, Book V, Rule XXIII of the Implementing Rules does not
require strict compliance with the above procedure, but only that the same be
"substantially observed."
Riviera Homes maintains that the letters it sent on 10 March 1999 to the Agabons
su ciently complied with the notice rule. These identically worded letters noted that the
Agabons had stopped working without permission that they failed to return for work
despite having been repeatedly told to report to the o ce and resume their employment.
2 6 The letters ended with an invitation to the Agabons to report back to the o ce and
return to work. 2 7
The apparent purpose of these letters was to advise the Agabons that they were
welcome to return back to work, and not to notify them of the grounds of termination. Still,
considering that only substantial compliance with the notice requirement is required, I am
prepared to say that the letters su ciently conform to the rst notice required under the
Implementing Rules. The purpose of the rst notice is to duly inform the employee that a
particular transgression is being considered against him or her, and that an opportunity is
being offered for him or her to respond to the charges. The letters served the purpose of
informing the Agabons of the pending matters beclouding their employment, and
extending them the opportunity to clear the air.
Contrary to the Agabons' claim, the letter-notice was correctly sent to the
employee's last known address, in compliance with the Implementing Rules. There is no
dispute that these letters were not actually received by the Agabons, as they had
apparently moved out of the address indicated therein. Still, the letters were sent to what
Riviera Homes knew to be the Agabons' last known address, as indicated in their personnel
le. The Agabons insist that Riviera Homes had known of the change of address, offering
as proof their company IDs which purportedly print out their correct new address. Yet, as
pointed out by the NLRC and the Court of Appeals, the addresses indicated in the IDs are
not the Agabons, but that of the person who is to be noti ed in case of emergency
involving either or both of the Agabons.
The actual violation of the notice requirement by Riviera Homes lies in its failure to
serve on the Agabons the second notice which should inform them of termination. As the
Decision notes, Riviera Homes' argument that sending the second notice was useless due
to the change of address is inutile, since the Implementing Rules plainly require that the
notice of termination should be served at the employee's last known address.
The importance of sending the notice of termination should not be trivialized. The
termination letter serves as indubitable proof of loss of employment, and its receipt
compels the employee to evaluate his or her next options. Without such notice, the
employee may be left uncertain of his fate; thus, its service is mandated by the
Implementing Rules. Non-compliance with the notice rule, as evident in this case,
contravenes the Implementing Rules. But does the violation serve to invalidate the
Agabons' dismissal for just cause?
The So-Called Constitutional Law Dimension
Justices Puno and Panganiban opine that the Agabons should be reinstated as a
consequence of the violation of the notice requirement. I respectfully disagree, for the
reasons expounded below. IHCDAS
Constitutional Considerations
Of Due Process and the Notice-Hearing
Requirement in Labor Termination Cases
Justice Puno proposes that the failure to render due notice and hearing prior to
dismissal for just cause constitutes a violation of the constitutional right to due process.
This view, as acknowledged by Justice Puno himself, runs contrary to the Court's
pronouncement in Serrano v. NLRC 2 8 that the absence of due notice and hearing prior to
dismissal, if for just cause, violates statutory due process.
The ponencia of Justice Vicente V. Mendoza in Serrano provides this cogent
overview of the history of the doctrine:
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. 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 for
every year of service. 2 9
Under Section 1 of the Termination Pay Law, an employer could dismiss an

employee without just cause by serving written notice on the employee at least one month
in advance or one-half month for every year of service of the employee, whichever was
longer. 3 0 Failure to serve such written notice entitled the employee to compensation
equivalent to his salaries or wages corresponding to the required period of notice from the
date of termination of his employment.
However, there was no similar written notice requirement under the Termination Pay
Law if the dismissal of the employee was for just cause. The Court, speaking through
Justice JBL Reyes, ruled in Phil. Refining Co. v. Garcia: 3 1
[Republic] Act 1052, as amended by Republic Act 1787, impliedly
recognizes the right of the employer to dismiss his employees (hired without
de nite period) whether for just case, as therein de ned or enumerated, or without
i t. If there be just cause, the employer is not required to serve any notice of
discharge nor to disburse termination pay to the employee. . . . 3 2
Clearly, the Court, prior to the enactment of the Labor Code, was ill-receptive to the
notion that termination for just cause without notice or hearing violated the constitutional
right to due process. Nonetheless, the Court recognized an award of damages as the
appropriate remedy. In Galsim v. PNB, 3 3 the Court held:
Of course, the employer's prerogative to dismiss employees hired without a
de nite period may be with or without cause. But if the manner in which such
right is exercised is abusive, the employer stands to answer to the dismissed
employee for damages. 3 4
The Termination Pay Law was among the repealed laws with the enactment of the
Labor Code in 1974. Signi cantly, the Labor Code, in its inception, did not require notice or
hearing before an employer could terminate an employee for just cause. As Justice
Mendoza explained:
Where the termination of employment was for a just cause, no notice was
required to be given to the employee. 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. 3 5
It cannot be denied though that the thinking that absence of notice or hearing prior
to termination constituted a constitutional violation has gained a jurisprudential foothold
with the Court. Justice Puno, in his Dissenting Opinion, cites several cases in support of
this theory, beginning with Batangas Laguna Tayabas Bus Co. v. Court of Appeals 3 6
wherein we held that "the failure of petitioner to give the private respondent the benefit of a
hearing before he was dismissed constitutes an infringement on his constitutional right to
due process of law. 3 7
Still, this theory has been refuted, pellucidly and effectively to my mind, by Justice
Mendoza's disquisition in Serrano, thus:
. . . 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 rst 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.
xxx xxx xxx
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). 3 8
The Court in the landmark case of People v. Marti 3 9 clari ed the proper dimensions
of the Bill of Rights.
That the Bill of Rights embodied in the Constitution is not meant to be
invoked against acts of private individuals nds 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 re ections. 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; Italics supplied) 4 0
I do not doubt that requiring notice and hearing prior to termination for just cause is
an admirable sentiment borne out of basic equity and fairness. Still, it is not a
constitutional requirement that can impose itself on the relations of private persons and
entities. Simply put, the Bill of Rights affords protection against possible State oppression
against its citizens, but not against an unjust or repressive conduct by a private party
towards another. CDcHSa
Justice Puno characterizes the notion that constitutional due process limits
government action alone as "passé," and adverts to nouvelle vague theories which assert
that private conduct may be restrained by constitutional due process. His dissent alludes
to the American experience making references to the post-Civil War/pre-World War II era
when the US Supreme Court seemed overly solicitous to the rights of big business over
those of the workers.
Theories, no matter how entrancing, remain theoretical unless adopted by
legislation, or more controversially, by judicial opinion. There were a few decisions of the
US Supreme Court that, ostensibly, imposed on private persons the values of the
constitutional guarantees. However, in deciding the cases, the American High Court found
it necessary to link the actors to adequate elements of the "State" since the Fourteenth
Amendment plainly begins with the words "No State shall. . . ." 4 1
More crucially to the American experience, it had become necessary to pass
legislation in order to compel private persons to observe constitutional values. While the
equal protection clause was deemed su cient by the Warren Court to bar racial
segregation in public facilities, it necessitated enactment of the Civil Rights Acts of 1964
to prohibit segregation as enforced by private persons within their property. In this
jurisdiction, I have trust in the statutory regime that governs the correction of private
wrongs. There are thousands of statutes, some penal or regulatory in nature, that are the
source of actionable claims against private persons. There is even no stopping the State,
through the legislative cauldron, from compelling private individuals, under pain of legal
sanction, into observing the norms ordained in the Bill of Rights.
Justice Panganiban's Separate Opinion asserts that corporate behemoths and even
individuals may now be sources of abuses and threats to human rights and liberties. 4 2 The
concern is not unfounded, but appropriate remedies exist within our statutes, and so
resort to the constitutional trump card is not necessary. Even if we were to engage the
premise, the proper juristic exercise should be to examine whether an employer has taken
the attributes of the State so that it could be compelled by the Constitution to observe the
proscriptions of the Bill of Rights. But the strained analogy simply does not square since
the attributes of an employer are starkly incongruous with those of the State. Employers
plainly do not possess the awesome powers and the tremendous resources which the
State has at its command.
The differences between the State and employers are not merely literal, but extend
to their very essences. Unlike the State, the raison d'etre of employers in business is to
accumulate pro ts. Perhaps the State and the employer are similarly capacitated to in ict
injury or discomfort on persons under their control, but the same power is also possessed
by a school principal, hospital administrator, or a religious leader, among many others.
Indeed, the scope and reach of authority of an employer pales in comparison with that of
the State. There is no basis to conclude that an employer, or even the employer class, may
be deemed a de facto state and on that premise, compelled to observe the Bill of Rights.
There is simply no nexus in their functions, distaff as they are, that renders it necessary to
accord the same jurisprudential treatment.
It may be so, as alluded in the dissent of Justice Puno, that a conservative court
system overly solicitous to the concerns of business may consciously gut away at rights
or privileges owing to the labor sector. This certainly happened before in the United States
in the early part of the twentieth century, when the progressive labor legislation such as
that enacted during President Roosevelt's New Deal regime — most of them addressing
problems of labor — were struck down by an arch-conservative Court. 4 3 The preferred
rationale then was to enshrine within the constitutional order business prerogatives,
rendering them superior to the express legislative intent. Curiously, following its judicial
philosophy at the time the U.S. Supreme Court made due process guarantee towards
employers prevail over the police power to defeat the cause of labor. 4 4
Of course, this Court should not be insensate to the means and methods by which
the entrenched powerful class may maneuver the socio-political system to ensure self-
preservation. However, the remedy to rightward judicial bias is not leftward judicial bias.
The more proper judicial attitude is to give due respect to legislative prerogatives,
regardless of the ideological sauce they are dipped in.
While the Bill of Rights maintains a position of primacy in the constitutional
hierarchy, 4 5 it has scope and limitations that must be respected and asserted by the
Court, even though they may at times serve somewhat bitter ends. The dissenting opinions
are palpably distressed at the effect of the Decision, which will undoubtedly provoke those
re exively sympathetic to the labor class. But haphazard legal theory cannot be used to
justify the obverse result. The adoption of the dissenting views would give rise to all sorts
of absurd constitutional claims. An excommunicated Catholic might demand his/her
reinstatement into the good graces of the Church and into communion on the ground that
excommunication was violative of the constitutional right to due process. A celebrity
contracted to endorse Pepsi Cola might sue in court to void a stipulation that prevents
him/her from singing the praises of Coca Cola once in a while, on the ground that such
stipulation violates the constitutional right to free speech. An employee might sue to
prevent the employer from reading outgoing e-mail sent through the company server using
the company e-mail address, on the ground that the constitutional right to privacy of
communication would be breached.
The above concerns do not in anyway serve to trivialize the interests of labor. But we
must avoid overarching declarations in order to justify an end result bene cial to labor. I
dread the doctrinal acceptance of the notion that the Bill of Rights, on its own, affords
protection and sanctuary not just from the acts of State but also from the conduct of
private persons. Natural and juridical persons would hesitate to interact for fear that a
misstep could lead to their being charged in court as a constitutional violator. Private
institutions that thrive on their exclusivity, such as churches or cliquish groups, could be
forced to renege on their traditional tenets, including vows of secrecy and the like, if
deemed by the Court as inconsistent with the Bill of Rights. Indeed, that fundamental right
of all private persons to be let alone would be forever diminished because of a
questionable notion that contravenes with centuries of political thought. aDcETC
It is not di cult to be enraptured by novel legal ideas. Their characterization is

susceptible to the same marketing traps that hook consumers to new products. With the
help of unique wrapping, a catchy label, and testimonials from professed experts from
exotic lands, a malodorous idea may gain wide acceptance, even among those self-
possessed with their own heightened senses of perception. Yet before we join the mad
rush in order to proclaim a theory as "brilliant," a rigorous test must rst be employed to
determine whether it complements or contradicts our own system of laws and juristic
thought. Without such analysis, we run the risk of abnegating the doctrines we have
fostered for decades and the protections they may have implanted into our way of life.
Should the Court adopt the view that the Bill of Rights may be invoked to invalidate
actions by private entities against private individuals, the Court would open the oodgates
to, and the docket would be swamped with, litigations of the scurrilous sort. Just as
patriotism is the last refuge of scoundrels, the broad constitutional claim is the nal resort
of the desperate litigant.
Constitutional Protection of Labor
The provisions of the 1987 Constitution a rm the primacy of labor and advocate a
multi-faceted state policy that affords, among others, full protection to labor. Section 18,
Article II thereof provides:
The State a rms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.
Further, Section 3, Article XIII states:

The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equal employment
opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective

bargaining and negotiations, and peaceful concerted activities, including the right
to strike in accordance with law. They shall be entitled to security to tenure,
humane conditions of work, and a living wage. They shall also participate in
policy and decision-making processes affecting their rights and bene ts as may
be provided by law.
The State shall promote the principle of shared responsibility between

workers and employers and the preferential use of voluntary modes in settling
disputes, including conciliation, and shall enforce their mutual compliance
therewith to foster industrial peace.
The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and the
right of enterprises to reasonable returns on investments, and to expansion and
growth.
The constitutional enshrinement of the guarantee of full protection of labor is not
novel to the 1987 Constitution. Section 6, Article XIV of the 1935 Constitution reads:
The State shall afford protection to labor, especially to working women,
and minors, and shall regulate the relations between the landowner and tenant,
and between labor and capital in industry and in agriculture. The State may
provide for compulsory arbitration.
Similarly, among the principles and state policies declared in the 1973 Constitution,
is that provided in Section 9, Article II thereof:
The State shall afford full protection to labor, promote full employment
and equality in employment, ensure equal work opportunities regardless of sex,
race or creed, and regulate the relations between workers and employers. The
State shall assure the rights of workers to self-organization, collective bargaining,
security of tenure, and just and humane conditions of work. The State may
provide for compulsory arbitration.
On the other hand, prior to the 1973 Constitution, the right to security of tenure
could only be found in legislative enactments and their respective implementing rules and
regulations. It was only in the 1973 Constitution that security of tenure was elevated as a
constitutional right. The development of the concept of security of tenure as a
constitutionally recognized right was discussed by this Court in BPI Credit Corporation v.
NLRC, 4 6 to wit:
The enthronement of the worker's right to security or tenure in our
fundamental law was not achieved overnight. For all its liberality towards labor,
our 1935 Constitution did not elevate the right as a constitutional right. For a long
time, the worker's security of tenure had only the protective mantle of statutes and
their interpretative rules and regulations. It was an uncertain protection that
sometimes yielded to the political permutations of the times. It took labor nearly
four decades of sweat and tears to persuade our people thru their leaders, to exalt
the worker's right to security of tenure as a sacrosanct constitutional right. It was
Article II, section 2 [9] of our 1973 Constitution that declared as a policy that the
State shall assure the right of workers to security tenure. The 1987 Constitution is
even more solicitous of the welfare of labor. Section 3 of its Article XIII mandates
that the State shall afford full protection to labor and declares that all workers
shall be entitled to security of tenure. Among the enunciated State policies are the
promotion of social justice and a just and dynamic social order. In contrast, the
prerogative of management to dismiss a worker, as an aspect of property right,
has never been endowed with a constitutional status.
The unequivocal constitutional declaration that all workers shall be entitled
to security of tenure spurred our lawmakers to strengthen the protective walls
around this hard earned right. The right was protected from undue infringement
both by our substantive and procedural laws. Thus, the causes for dismissing
employees were more de ned and restricted; on the other hand, the procedure of
termination was also more clearly delineated. These substantive and procedural
laws must be strictly complied with before a worker can be dismissed from his
employment. 4 7
It is quite apparent that the constitutional protection of labor was entrenched more
than eight decades ago, yet such did not prevent this Court in the past from a rming
dismissals for just cause without valid notice. Nor was there any pretense made that this
constitutional maxim afforded a laborer a positive right against dismissal for just cause on
the ground of lack of valid prior notice. As demonstrated earlier, it was only after the
enactment of the Labor Code that the doctrine relied upon by the dissenting opinions
became en vogue. This point highlights my position that the violation of the notice
requirement has statutory moorings, not constitutional. DSTCIa
It should be also noted that the 1987 Constitution also recognizes the principle of
shared responsibility between workers and employers, and the right of enterprise to
reasonable returns, expansion, and growth. Whatever perceived imbalance there might
have been under previous incarnations of the provision have been obviated by Section 3,
Article XIII.
In the case of Manila Prince Hotel v. GSIS , 4 8 we a rmed the presumption that all
constitutional provisions are self-executing. We reasoned that to declare otherwise would
result in the pernicious situation wherein by mere inaction and disregard by the legislature,
constitutional mandates would be rendered ineffectual. Thus, we held:
As against constitutions of the past, modern constitutions have been
generally based upon a different principle and have often become in effect
extensive codes of laws intended to operate directly upon the people in a manner
similar to that of statutory enactments, and the function of constitutional
conventions has evolved into one more like that of a legislative body. Hence,
unless it is expressly provided that a legislative act is necessary to enforce a
constitutional mandate, the presumption now is that all provisions of the
constitution are self-executing. If the constitutional provisions are treated as
requiring legislation instead of self-executing, the legislature would have the
power to ignore and practically nullify the mandate of the fundamental law. This
can be cataclysmic. That is why the prevailing view is, as it has always been, that
—
. . . in case of doubt, the Constitution should be considered self-
executing rather than non-self-executing. . . . Unless the contrary is clearly
intended, the provisions of the Constitution should be considered self-
executing, as a contrary rule would give the legislature discretion to
determine when, or whether, they shall be effective. These provisions
would be subordinated to the will of the lawmaking body, which could
make them entirely meaningless by simply refusing to pass the needed
implementing statute. 4 9
In further discussing self-executing provisions, this Court stated that:

In self-executing constitutional provisions, the legislature may still enact
legislation to facilitate the exercise of powers directly granted by the constitution,
further the operation of such a provision, prescribe a practice to be used for its
enforcement, provide a convenient remedy for the protection of the rights secured
or the determination thereof, or place reasonable safeguards around the exercise
of the right. The mere fact that legislation may supplement and add to or
prescribe a penalty for the violation of a self-executing constitutional provision
does not render such a provision ineffective in the absence of such legislation.
The omission from a constitution of any express provision for a remedy for
enforcing a right or liability is not necessarily an indication that it was not
intended to be self-executing. The rule is that a self-executing provision of the
constitution does not necessarily exhaust legislative power on the subject, but
any legislation must be in harmony with the constitution, further the exercise of
constitutional right and make it more available. Subsequent legislation however
does not necessarily mean that the subject constitutional provision is not, by
itself, fully enforceable. 5 0
Thus, the constitutional mandates of protection to labor and security of tenure may
be deemed as self-executing in the sense that these are automatically acknowledged and
observed without need for any enabling legislation. However, to declare that the
constitutional provisions are enough to guarantee the full exercise of the rights embodied
therein, and the realization of ideals therein expressed, would be impractical, if not
unrealistic. The espousal of such view presents the dangerous tendency of being
overbroad and exaggerated. The guarantees of "full protection to labor" and "security of
tenure", when examined in isolation, are facially unquali ed, and the broadest interpretation
possible suggests a blanket shield in favor of labor against any form of removal
regardless of circumstance. This interpretation implies an unimpeachable right to
continued employment — a utopian notion, doubtless — but still hardly within the
contemplation of the framers. Subsequent legislation is still needed to de ne the
parameters of these guaranteed rights to ensure the protection and promotion, not only
the rights of the labor sector, but of the employers' as well. Without speci c and pertinent
legislation, judicial bodies will be at a loss, formulating their own conclusion to
approximate at least the aims of the Constitution.
Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a source of a
positive enforceable right to stave off the dismissal of an employee for just cause owing
to the failure to serve proper notice or hearing. As manifested by several framers of the
1987 Constitution, the provisions on social justice require legislative enactments for their
enforceability. This is re ected in the record of debates on the social justice provisions of
the Constitution:
MS. [FELICITAS S.] AQUINO: We appreciate the concern of the
Commissioner. But this Committee [on Social Justice] has actually become the
forum already of a lot of speci c grievances and speci c demands, such that
understandably, we may have been, at one time or another, dangerously treading
into the functions of legislation. Our only plea to the Commission is to focus our
perspective on the matter of social justice and its rightful place in the
Constitution. What we envision here is a mandate specific enough that would give
impetus for statutory implementation. We would caution ourselves in terms of the
judicious exercise of self-censorship against treading into the functions of
legislation. (emphasis supplied) 5 1
xxx xxx xxx
[FLORENZ D.] REGALADO: I notice that the 1935 Constitution had only one
section on social justice; the same is true with the 1973 Constitution. But they
seem to have stood us in good stead; and I am a little surprised why, despite that
attempt at self-censorship, there are certain provisions here which are properly for
legislation. 5 2
xxx xxx xxx
BISHOP [TEODORO S.] BACANI: [I] think the distinction that was given
during the presentation of the provisions on the Bill of Rights by Commissioner
Bernas is very apropos here. He spoke of self-executing rights which belong
properly to the Bill of Rights, and then he spoke of a new body of rights which are
more of claims and that these have come about largely through the works of
social philosophers and then the teaching of the Popes. They focus on the
common good and hence, it is not as easy to pinpoint precisely these rights nor
the situs of the rights. And yet, they exist in relation to the common good. 5 3
xxx xxx xxx
MS. [MINDA LUZ M.] QUESADA: I think the nitty-gritty of this kind of
collaboration will be left to legislation but the important thing now is the
conservation, utilization or maximization of the very limited resources. . . .
[RICARDO J.] ROMULO: The other problem is that, by and large,
government services are ine cient. So, this is a problem all by itself. On Section
19, where the report says that people's organizations as a principal means of
empowering the people to pursue and protect through peaceful means. . . ., I do
not suppose that the Committee would like to either preempt or exclude the
legislature, because the concept of a representative and democratic system really
is that the legislature is normally the principal means. HICSTa
[EDMUNDO G.] GARCIA: That is correct. In fact, people cannot even dream
of in uencing the composition or the membership of the legislature, if they do not
get organized. It is, in fact, a recognition of the principle that unless a citizenry is
organized and mobilized to pursue its ends peacefully, then it cannot really
participate effectively. 5 4
There is no pretense on the part of the framers that the provisions on Social Justice,
particularly Section 3 of Article XIII, are self-executory. Still, considering the rule that
provisions should be deemed self-executing if enforceable without further legislative
action, an examination of Section 3 of Article XIII is warranted to determine whether it is
complete in itself as a de nitive law, or if it needs future legislation for completion and
enforcement. 5 5 Particularly, we should inquire whether or not the provision voids the
dismissal of a laborer for just cause if no valid notice or hearing is attendant.
Constitutional Commissioner Fr. Joaquin G. Bernas makes a significant comment on
Section 3, Article XIII of the 1987 Constitution:
The [cluster] of rights guaranteed in the second paragraph are the right "to
security of tenure, humane conditions of work, and a living wage." Again,
although these have been set apart by a period (.) from the next sentence and are
therefore not modi ed by the nal phrase "as may be provided by law," it is not
the intention to place these beyond the reach of valid laws. . . . (emphasis
supplied) 5 6
At present, the Labor Code is the primary mechanism to carry out the Constitution's
directives. This is clear from Article 3 5 7 under Chapter 1 thereof which essentially restates
the policy on the protection of labor as worded in the 1973 Constitution, which was in
force at the time of enactment of the Labor Code. It crystallizes the fundamental law's
policies on labor, de nes the parameters of the rights granted to labor such as the right to
security of tenure, and prescribes the standards for the enforcement of such rights in
concrete terms. While not infallible, the measures provided therein tend to ensure the
achievement of the constitutional aims.
The necessity for laws concretizing the constitutional principles on the protection of
labor is evident in the reliance placed upon such laws by the Court in resolving the issue of
the validity of a worker's dismissal. In cases where that was the issue confronting the
Court, it consistently recognized the constitutional right to security of tenure and
employed the standards laid down by prevailing laws in determining whether such right
was violated. 5 8 The Court's reference to laws other than the Constitution in resolving the
issue of dismissal is an implicit acknowledgment that the right to security of tenure, while
recognized in the Constitution, cannot be implemented uniformly absent a law prescribing
concrete standards for its enforcement.
As discussed earlier, the validity of an employee's dismissal in previous cases was
examined by the Court in accordance with the standards laid down by Congress in the
Termination Pay Law, and subsequently, the Labor Code and the amendments thereto. At
present, the validity of an employee's dismissal is weighed against the standards laid
down in Article 279, as well as Article 282 in relation to Article 277(b) of the Labor Code,
for a dismissal for just cause, and Article 283 for a dismissal for an authorized cause.
The Effect of Statutory Violation
Of Notice and Hearing
There is no doubt that the dismissal of an employee even for just cause, without
prior notice or hearing, violates the Labor Code. However, does such violation necessarily
void the dismissal?
Before I proceed with my discussion on dismissals for just causes, a brief comment
regarding dismissals for authorized cause under Article 283 of the Labor Code. While the
justiciable question in Serrano pertained to a dismissal for unauthorized cause, the ruling
therein was crafted as de nitive to dismissals for just cause. Happily, the Decision today
does not adopt the same unwise tack. It should be recognized that dismissals for just
cause and dismissals for authorized cause are governed by different provisions, entail
divergent requisites, and animated by distinct rationales. The language of Article 283
expressly effects the termination for authorized cause to the service of written notice on
the workers and the Ministry of Labor at least one (1) month before the intended date of
termination. This constitutes an eminent difference than dismissals for just cause, wherein
the causal relation between the notice and the dismissal is not expressly stipulated. The
circumstances distinguishing just and authorized causes are too markedly different to be
subjected to the same rules and reasoning in interpretation.
Since the present petition is limited to a question arising from a dismissal for just
cause, there is no reason for making any pronouncement regarding authorized causes.
Such declaration would be merely obiter, since they are neither the law of the case nor
dispositive of the present petition. When the question becomes justiciable before this
Court, we will be confronted with an appropriate factual milieu on which we can render a
more judicious disposition of this admittedly important question.
B. Dismissal for Just Cause
There is no express provision in the Labor Code that voids a dismissal for just cause
on the ground that there was no notice or hearing. Under Section 279, the employer is
precluded from dismissing an employee except for a just cause as provided in Section
282, or an authorized cause under Sections 283 and 284. Based on reading Section 279
alone, the existence of just cause by itself is sufficient to validate the termination.
Just cause is de ned by Article 282, which unlike Article 283, does not condition the
termination on the service of written notices. Still, the dissenting opinions propound that
even if there is just cause, a termination may be invalidated due to the absence of notice or
hearing. This view is anchored mainly on constitutional moorings, the basis of which I had
argued against earlier. For determination now is whether there is statutory basis under the
Labor Code to void a dismissal for just cause due to the absence of notice or hearing. DaHISE
As pointed out by Justice Mendoza in Serrano, it was only in 1989 that the Labor
Code was amended to enshrine into statute the twin requirements of notice and hearing.
5 9 Such requirements are found in Article 277 of the Labor Code, under the heading
"Miscellaneous Provisions." Prior to the amendment, the notice-hearing requirement was
found under the implementing rules issued by the then Minister of Labor in 1981. The
present-day implementing rules likewise mandate that the standards of due process,
including the requirement of written notice and hearing, "be substantially observed." 6 0
Indubitably, the failure to substantially comply with the standards of due process,
including the notice and hearing requirement, may give rise to an actionable claim against
the employer. Under Article 288, penalties may arise from violations of any provision of the
Labor Code. The Secretary of Labor likewise enjoys broad powers to inquire into existing
relations between employers and employees. Systematic violations by management of the
statutory right to due process would fall under the broad grant of power to the Secretary
of Labor to investigate under Article 273.
However, the remedy of reinstatement despite termination for just cause is simply
not authorized by the Labor Code. Neither the Labor Code nor its implementing rules
states that a termination for just cause is voided because the requirement of notice and
hearing was not observed. This is not simply an inadvertent semantic failure, but a
conscious effort to protect the prerogatives of the employer to dismiss an employee for
just cause. Notably, despite the several pronouncements by this Court in the past equating
the notice-hearing requirement in labor cases to a constitutional maxim, neither the
legislature nor the executive has adopted the same tack, even gutting the protection to
provide that substantial compliance with due process suffices.
The Labor Code signi cantly eroded management prerogatives in the hiring and
ring of employees. Whereas employees could be dismissed even without just cause
under the Termination Pay Law 6 1 , the Labor Code affords workers broad security of
tenure. Still, the law recognizes the right of the employer to terminate for just cause. The
just causes enumerated under the Labor Code — serious misconduct or willful
disobedience, gross and habitual neglect, fraud or willful breach of trust, commission of a
crime by the employee against the employer, and other analogous causes — are
characterized by the harmful behavior of an employee against the business or the person
of the employer.
These just causes for termination are not negated by the absence of notice or
hearing. An employee who tries to kill the employer cannot be magically absolved of
trespasses just because the employer forgot to serve due notice. Or a less extreme
example, the gross and habitual neglect of an employee will not be improved upon just
because the employer failed to conduct a hearing prior to termination.
In fact, the practical purpose of requiring notice and hearing is to afford the
employee the opportunity to dispute the contention that there was just cause in the
dismissal. Yet it must be understood — if a dismissed employee is deprived of the right to
notice and hearing, and thus denied the opportunity to present countervailing evidence that
disputes the nding of just cause, reinstatement will be valid not because the notice and
hearing requirement was not observed, but because there was no just cause in the
dismissal. The opportunity to dispute the nding of the just cause is readily available
before the Labor Arbiter, and the subsequent levels of appellate review. Again, as held in
Serrano:
Even in cases of dismissal under Art. 282, the purpose for the requirement
of notice and hearing is not to comply with the 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 ling a complaint with the regional branch
of the National Labor Relations Commission. 6 2
The Labor Code presents no textually demonstrable commitment to invalidate a

dismissal for just cause due to the absence of notice or hearing. This is not surprising, as
such remedy will not restore the employer or employee into equity. Absent a showing of
integral causation, the mutual in iction of wrongs does not negate either injury, but instead
enforces two independent rights of relief.
The Damages' Dimensions
Award for Damages Must Have Statutory Basis
The Court has grappled with the problem of what should be the proper remedial
relief of an employee dismissed with just cause, but not afforded either notice or hearing.
In a long line of cases, beginning with Wenphil Corp. v. NLRC 6 3 and up until Serrano in
2000, the Court had deemed an indemni cation award as su cient to answer for the
violation by the employer against the employee. However, the doctrine was modi ed in
Serrano.
I disagree with Serrano insofar as it held that employees terminated for just cause
are to be paid backwages from the time employment was terminated "until it is
determined that the termination is for just cause because the failure to hear him before he
is dismissed renders the termination of his employment without legal effect." 6 4 Article
279 of the Labor Code clearly authorizes the payment of backwages only if an employee is
unjustly dismissed. A dismissal for just cause is obviously antithetical to an unjust
dismissal. An award for backwages is not clearly warranted by the law.
The Impropriety of Award for Separation Pay
The formula of one month's pay for every year served does have statutory basis. It is
found though in the Labor Code, not the Civil Code. Even then, such computation is made
for separation pay under the Labor Code. But separation pay is not an appropriate as a
remedy in this case, or in any case wherein an employee is terminated for just cause. As
Justice Vitug noted in his separate opinion in Serrano, an employee whose employment is
terminated for a just cause is not entitled to the payment of separation bene ts. 6 5
Separation pay is traditionally a monetary award paid as an alternative to reinstatement
which can no longer be effected in view of the long passage of time or because of the
realities of the situation. 6 6 However, under Section 7, Rule 1, Book VI of the Omnibus Rules
Implementing the Labor Code, "[t]he separation from work of an employee for a just cause
does not entitle him to the termination pay provided in the Code." 6 7 Neither does the
Labor Code itself provide instances wherein separation pay is warranted for dismissals
with just cause. Separation pay is warranted only for dismissals for authorized causes, as
enumerated in Article 283 and 284 of the Labor Code.
The Impropriety of Equity Awards
Admittedly, the Court has in the past authorized the award of separation pay for duly
terminated employees as a measure of social justice, provided that the employee is not
guilty of serious misconduct re ecting on moral character. 6 8 This doctrine is inapplicable
in this case, as the Agabons are guilty of abandonment, which is the deliberate and
unjusti ed refusal of an employee to resume his employment. Abandonment is
tantamount to serious misconduct, as it constitutes a willful breach of the employer-
employee relationship without cause. IcSEAH
The award of separation pay as a measure of social justice has no statutory basis,
but clearly emanates from the Court's so-called "equity jurisdiction." The Court's equity
jurisdiction as a basis for award, no matter what form it may take, is likewise unwarranted
in this case. Easy resort to equity should be avoided, as it should yield to positive rules
which pre-empt and prevail over such persuasions. 6 9 Abstract as the concept is, it does
not admit to definite and objective standards.
I consider the pronouncement regarding the proper monetary awards in such cases
as Wenphil Corp. v. NLRC , 7 0 Reta, 7 1 and to a degree, even Serrano as premised in part on
equity. This decision is premised in part due to the absence of cited statutory basis for
these awards. In these cases, the Court deemed an indemnity award proper without
exactly saying where in statute could such award be derived at. Perhaps, equity or social
justice can be invoked as basis for the award. However, this sort of arbitrariness,
indeterminacy and judicial usurpation of legislative prerogatives is precisely the source of
my discontent. Social justice should be the aspiration of all that we do, yet I think it the
more mature attitude to consider that it ebbs and ows within our statutes, rather than
view it as an independent source of funding.
Article 288 of the Labor Code as a Source of Liability
Another putative source of liability for failure to render the notice requirement is
Article 288 of the Labor Code, which states:
Article 288 states:
Penalties. — Except as otherwise provided in this Code, or unless the acts
complained of hinges on a question of interpretation or implementation of
ambiguous provisions of an existing collective bargaining agreement, any
violation of the provisions of this Code declared to be unlawful or penal in nature
shall be punished with a ne of not less than One Thousand Pesos (P1,000.00)
nor more than Ten Thousand Pesos (P10,000.00), or imprisonment of not less
than three months nor more than three years, or both such ne and imprisonment
at the discretion of the court.
It is apparent from the provision that the penalty arises due to contraventions of the
provisions of the Labor Code. It is also clear that the provision comes into play regardless
of who the violator may be. Either the employer or the employee may be penalized, or
perhaps even officials tasked with implementing the Labor Code.
However, it is apparent that Article 288 is a penal provision; hence, the prescription
for penalties such as ne and imprisonment. The Article is also explicit that the imposition
of ne or imprisonment is at the "discretion of the court." Thus, the proceedings under the
provision is penal in character. The criminal case has to be instituted before the proper
courts, and the Labor Code violation subject thereof duly proven in an adversarial
proceeding. Hence, Article 288 cannot apply in this case and serve as basis to impose a
penalty on Riviera Homes.
I also maintain that under Article 288 the penalty should be paid to the State, and not
to the person or persons who may have suffered injury as a result of the violation. A
penalty is a sum of money which the law requires to be paid by way of punishment for
doing some act which is prohibited or for not doing some act which is required to be done.
7 2 A penalty should be distinguished from damages which is the pecuniary compensation
or indemnity to a person who has suffered loss, detriment, or injury, whether to his person,
property, or rights, on account of the unlawful act or omission or negligence of another.
Article 288 clearly serves as a punitive ne, rather than a compensatory measure, since the
provision penalizes an act that violates the Labor Code even if such act does not cause
actual injury to any private person.
Independent of the employee's interests protected by the Labor Code is the interest
of the State in seeing to it that its regulatory laws are complied with. Article 288 is
intended to satiate the latter interest. Nothing in the language of Article 288 indicates an
intention to compensate or remunerate a private person for injury he may have sustained.
It should be noted though that in Serrano, the Court observed that since the
promulgation of Wenphil Corp. v. NLRC 7 3 in 1989, " nes imposed for violations of the
notice requirement have varied from P1,000.00 to P2,000.00 to P5,000.00 to P10,000.00."
7 4 Interestingly, this range is the same range of the penalties imposed by Article 288.
These " nes" adverted to in Serrano were paid to the dismissed employee. The use of the
term " nes," as well as the terminology employed a few other cases, 7 5 may have left an
erroneous impression that the award implemented beginning with Wenphil was based on
Article 288 of the Labor Code. Yet, an examination of Wenphil reveals that what the Court
actually awarded to the employee was an "indemnity", dependent on the facts of each case
and the gravity of the omission committed by the employer. There is no mention in Wenphil
of Article 288 of the Labor Code, or indeed, of any statutory basis for the award.
The Proper Basis: Employer's Liability under the Civil Code
As earlier stated, Wenphil allowed the payment of indemnity to the employee
dismissed for just cause is dependent on the facts of each case and the gravity of the
omission committed by the employer. However, I considered Wenphil awed insofar as it
is silent as to the statutory basis for the indemnity award. This failure, to my mind, renders
it unwise for to reinstate the Wenphil rule, and foster the impression that it is the judicial
business to invent awards for damages without clear statutory basis.
The proper legal basis for holding the employer liable for monetary damages to the
employee dismissed for just cause is the Civil Code. The award of damages should be
measured against the loss or injury suffered by the employee by reason of the employer's
violation or, in case of nominal damages, the right vindicated by the award. This is the
proper paradigm authorized by our law, and designed to obtain the fairest possible relief .
Under Section 217(4) of the Labor Code, the Labor Arbiter has jurisdiction over
claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations. It is thus the duty of Labor Arbiters to adjudicate claims for
damages, and they should disabuse themselves of any inhibitions if it does appear that an
award for damages is warranted. As triers of facts in a specialized eld, they should attune
themselves to the particular conditions or problems attendant to employer-employee
relationships, and thus be in the best possible position as to the nature and amount of
damages that may be warranted in this case.
The damages referred under Section 217(4) of the Labor Code are those available
under the Civil Code. It is but proper that the Civil Code serve as the basis for the
indemnity, it being the law that regulates the private relations of the members of civil
society, determining their respective rights and obligations with reference to persons,
things, and civil acts. 7 6 No matter how impressed with the public interest the relationship
between a private employer and employee is, it still is ultimately a relationship between
private individuals. Notably, even though the Labor Code could very well have provided set
rules for damages arising from the employer-employee relationship, referral was instead
made to the concept of damages as enumerated and defined under the Civil Code. HSDIaC
Given the long controversy that has dogged this present issue regarding dismissals
for just cause, it is wise to lay down standards that would guide the proper award of
damages under the Civil Code in cases wherein the employer failed to comply with
statutory due process in dismissals for just cause.
First. I believe that it can be maintained as a general rule, that failure to comply with
the statutory requirement of notice automatically gives rise to nominal damages, at the
very least, even if the dismissal was sustained for just cause.
Nominal damages are adjudicated in order that a right of a plaintiff which has been
violated or invaded by another may be vindicated or recognized without having to
indemnify the plaintiff for any loss suffered by him. 7 7 Nominal damages may likewise be
awarded in every obligation arising from law, contracts, quasi-contracts, acts or omissions
punished by law, and quasi-delicts, or where any property right has been invaded.
Clearly, the bare act of failing to observe the notice requirement gives rise to
nominal damages assessable against the employer and due the employee. The Labor
Code indubitably entitles the employee to notice even if dismissal is for just cause, even if
there is no apparent intent to void such dismissals de ciently implemented. It has also
been held that one's employment, profession, trade, or calling is a "property right" and the
wrongful interference therewith gives rise to an actionable wrong. 7 8
In Better Buildings, Inc. v. NLRC , 7 9 the Court ruled that while the termination therein
was for just and valid cause, the manner of termination was done in complete disregard of
the necessary procedural safeguards. 8 0 The Court found nominal damages as the proper
form of award, as it was purposed to vindicate the right to procedural due process
violated by the employer. 8 1 A similar holding was maintained in Iran v. NLRC 8 2 and Malaya
Shipping v. NLRC . 8 3 The doctrine has express statutory basis, duly recognizes the
existence of the right to notice, and vindicates the violation of such right. It is sound,
logical, and should be adopted as a general rule.
The assessment of nominal damages is left to the discretion of the court, 8 4 or in
labor cases, of the Labor Arbiter and the successive appellate levels. The authority to
nominate standards governing the award of nominal damages has clearly been delegated
to the judicial branch, and it will serve good purpose for this Court to provide such
guidelines. Considering that the affected right is a property right, there is justi cation in
basing the amount of nominal damages on the particular characteristics attaching to the
claimant's employment. Factors such as length of service, positions held, and received
salary may be considered to obtain the proper measure of nominal damages. After all, the
degree by which a property right should be vindicated is affected by the estimable value of
such right.
At the same time, it should be recognized that nominal damages are not meant to
be compensatory, and should not be computed through a formula based on actual losses.
Consequently, nominal damages are usually limited in pecuniary value. 8 5 This fact should
be impressed upon the prospective claimant, especially one who is contemplating seeking
actual/compensatory damages.
Second. Actual or compensatory damages are not available as a matter of right to
an employee dismissed for just cause but denied statutory due process. They must be
based on clear factual and legal bases, 8 6 and correspond to such pecuniary loss suffered
by the employee as duly proven. 8 7 Evidently, there is less degree of discretion to award
actual or compensatory damages.
I recognize some inherent di culties in establishing actual damages in cases for
terminations validated for just cause. The dismissed employee retains no right to
continued employment from the moment just cause for termination exists, and such time
most likely would have arrived even before the employer is liable to send the rst notice.
As a result, an award of backwages disguised as actual damages would almost never be
justi ed if the employee was dismissed for just cause. The possible exception would be if
it can be proven the ground for just cause came into being only after the dismissed
employee had stopped receiving wages from the employer.
Yet it is not impossible to establish a case for actual damages if dismissal was for
just cause. Particularly actionable, for example, is if the notices are not served on the
employee, thus hampering his/her opportunities to obtain new employment. For as long as
it can be demonstrated that the failure of the employer to observe procedural due process
mandated by the Labor Code is the proximate cause of pecuniary loss or injury to the
dismissed employee, then actual or compensatory damages may be awarded.
Third. If there is a nding of pecuniary loss arising from the employer violation, but
the amount cannot be proved with certainty, then temperate or moderate damages are
available under Article 2224 of the Civil Code. Again, su cient discretion is afforded to the
adjudicator as regards the proper award, and the award must be reasonable under the
circumstances. 8 8 Temperate or nominal damages may yet prove to be a plausible remedy,
especially when common sense dictates that pecuniary loss was suffered, but incapable
of precise definition.
Fourth. Moral and exemplary damages may also be awarded in the appropriate
circumstances. As pointed out by the Decision, moral damages are recoverable where the
dismissal of the employee was attended by bad faith, fraud, or was done in a manner
contrary to morals, good customs or public policy, or the employer committed an act
oppressive to labor. 8 9 Exemplary damages may avail if the dismissal was effected in a
wanton, oppressive or malevolent manner.
Appropriate Award of Damages to the Agabons
The records indicate no proof exists to justify the award of actual or compensatory
damages, as it has not been established that the failure to serve the second notice on the
Agabons was the proximate cause to any loss or injury. In fact, there is not even any
showing that such violation caused any sort of injury or discomfort to the Agabons. Nor do
they assert such causal relation. Thus, the only appropriate award of damages is nominal
damages. Considering the circumstances, I agree that an award of Fifteen Thousand
Pesos (P15,000.00) each for the Agabons is sufficient.
All premises considered, I VOTE to:
(1) DENY the PETITION for lack of merit, and AFFIRM the Decision of the
Court of Appeals dated 23 January 2003, with the MODIFICATION
that in addition, Riviera Homes be ORDERED to pay the petitioners the
sum of Fifteen Thousand Pesos (P15,000.00) each, as nominal
damages. IHAcCS
(2) HOLD that henceforth, dismissals for just cause may not be invalidated
due to the failure to observe the due process requirements under the
Labor Code, and that the only indemnity award available to the
employee dismissed for just cause are damages under the Civil Code
as duly proven. Any and all previous rulings and statements of the
Court inconsistent with this holding are now deemed INOPERATIVE.
Footnotes
1. Penned by Associate Justice Marina L. Buzon and concurred in by Associate Justices
Josefina Guevara-Salonga and Danilo B. Pine.
2. Rollo, p. 41.
3. Id., pp. 13–14.

4. Id., p. 92.
5. Id., p. 131.
6. Id., p. 173.
7. Id., p. 20.
8. Id., pp. 21–23.
9. Id., p. 45.
10. Id., pp. 42–43.
11. Rosario v. Victory Ricemill, G.R. No. 147572, 19 February 2003, 397 SCRA 760, 767.
12. Reyes v. Maxim's Tea House, G.R. No. 140853, 27 February 2003, 398 SCRA 288, 298.
13. Santos v. San Miguel Corporation, G.R. No. 149416, 14 March 2003, 399 SCRA 172, 182.
14. Columbus Philippine Bus Corporation v. NLRC, 417 Phil. 81, 100 (2001).
15. De Paul/King Philip Customs Tailor v. NLRC, 364 Phil. 91, 102 (1999).
16. Sta. Catalina College v. NLRC, G.R. No. 144483, 19 November 2003.
17. Cosmos Bottling Corporation v. NLRC , G.R. No. 111155, 23 October 1997, 281 SCRA 146,
153–154.

18. G.R. No. L-49875, 21 November 1979, 94 SCRA 472, 478.
19. Judy Philippines, Inc. v. NLRC, 352 Phil. 593, 606 (1998).
20. Philippine-Singapore Transport Services, Inc. v. NLRC, 343 Phil. 284, 291 (1997).
21. See Stolt-Nielsen Marine Services, Inc. v. NLRC , G.R. No. 128395, 29 December 1998, 300
SCRA 713, 720.
22. G.R. No. 117040, 27 January 2000, 323 SCRA 445.

23. G.R. No. 80587, 8 February 1989, 170 SCRA 69.
24. Id. at 76.
25. Id.
26. Solesbee v. Balkcom , 339 U.S. 9, 16 (1950) (Frankfurter, J., dissenting). Due process is
violated if a practice or rule "offends some principle of justice so rooted in the traditions
and conscience of our people as to be ranked as fundamental;" Snyder v.
Massachusetts, 291 U.S. 97, 105 (1934).
27. Department Order No. 9 took effect on 21 June 1997. Department Order No. 10 took effect
on 22 June 1997.
28. G.R. No. 115394, 27 September 1995, 248 SCRA 535.
29. G.R. No. 122666, 19 June 1997, 274 SCRA 386.

30. G.R. No. 114313, 29 July 1996, 259 SCRA 699, 700.
31. Serrano, supra, Vitug, J., Separate (Concurring and Dissenting) Opinion, 323 SCRA 524,
529–530 (2000).
32. Capili v. NLRC, G.R. No. 117378, 26 March 1997, 270 SCRA 488, 495.
33. Filipro, Inc. v. NLRC, G.R. No. L-70546, 16 October 1986, 145 SCRA 123.
34. Calalang v. Williams, 70 Phil. 726, 735 (1940).
35. Gelos v. Court of Appeals, G.R. No. 86186, 8 May 1992, 208 SCRA 608, 616.
36. G.R. No. 112100, 27 May 1994, 232 SCRA 613, 618.
37. Art. 2221, Civil Code.
38. G.R. No. 108405. April 4, 2003 citing Kwikway Engineering Works v. NLRC , G.R. No. 85014,
22 March 1991, 195 SCRA 526, 532; Aurelio v. NLRC , G.R. No. 99034, 12 April 1993, 221
SCRA 432, 443; and Sampaguita Garments Corporation v. NLRC , G.R. No. 102406, 17
June 1994, 233 SCRA 260, 265.
39. Id. citing Better Buildings, Inc. v. NLRC , G.R. No. 109714, 15 December 1997, 283 SCRA 242,
251; Iran v. NLRC, G.R. No. 121927, 22 April 1998, 289 SCRA 433, 442.
40. Savellano v. Northwest Airlines, G.R. No. 151783, 8 July 2003.

41. Villar v. NLRC, G.R. No. 130935, 11 May 2000.
42. Rollo, pp. 60–71.
43. UST Faculty Union v. NLRC, G.R. No. 90445, 2 October 1990.
44. "Whereas" clauses, P.D. No. 851.
45. "Art. 113. Wage deduction. — No employer, in his own behalf or in behalf of any person,
shall make any deduction from the wages of his employees except:
(a) In cases where the worker is insured with his consent by the employer, and the deduction is
to recompense the employer for the amount paid by him as premium on the insurance;
(b) For union dues, in cases where the right of the worker or his union to check off has been
recognized by the employer or authorized in writing by the individual worker concerned;
and
(c) In cases where the employer is authorized by law or regulations issued by the Secretary of
Labor and Employment.
PUNO, J., dissenting .
1. Plutarch, Lives: Themistocles, Ch. 3, Sec. 11.
2. G.R. No. 80587, February 8, 1989, 170 SCRA 69.

3. G.R. No. 117040, January 27, 2000, 323 SCRA 445.
4. Id., 472.
5. Id., 499–500; 523–524.
6. Ponencia, 15.
7. See Fabre, C., Social Rights Under the Constitution. Government and the Decent Life. Oxford
University Press, 2000.
8. Rerum Novarum (On the Condition of the Working Classes). Encyclical of His Holiness Pope
Leo XIII on Capital and Labor issued on May 15, 1891.
9. I J. Aruego, The Framing of the Philippine Constitution 147 (1936).

10. L-46496, May 29, 1939, 7 Lawyer's Journal 487.
11. Id., 494.
12. 70 Phil. 340 (1940).
13. Id., 357.
14. II J. Aruego, The Framing of the Philippine Constitution 656–657 (1937).
15. 70 Phil. 726 (1940).
16. The welfare of the people is the supreme law.

17. 70 Phil. 726, 734–735 (1940).
18. Fernando, Enrique M., Constitution of the Philippines, 80–81 (1974).
19. Bernas, Joaquin G., The 1987 Constitution of the Republic of the Philippines. A
Commentary, 81 (2003).
20. G.R. No. 50320, July 31, 1981, 106 SCRA 444.
21. Id., 462.
22. L-24626, June 28, 1974, 57 SCRA 489.
23. Id., 495–496.
24. Section 10, Article II (Declaration of State Policies and Principles, State Policies), 1987
Constitution provides: "The State shall promote social justice in all phases of
development."
25. Article XIII (Social Justice and Human Rights), 1987 Constitution.
26. L-45824, June 19, 1985, 137 SCRA 42.
27. Id., 48.
28. Philippine Blooming Mills Employees Organization v. Philippine Blooming Mills Co ., L-

31195, June 5, 1973, 51 SCRA 189, 210.
29. Bocobo, Jorge., Cult of Legalism, cited by Mr. Justice Gregorio Perfecto in his Concurring
Opinion in Ocampo Vda. De Gomez v. The Government Insurance Board , 78 Phil. 216,
225 (1947); and by Mr. Justice Teodoro Padilla some 40 years later in National Service
Corporation v. National Labor Relations Commission , G.R. No. 69870, November 29,
1988, 168 SCRA 122, 138.
30. Magnolia Corporation v. National Labor Relations Commission , G.R. No. 116813, November
24, 1995, 250 SCRA 332, 340.
31. L-49418, February 29, 1980, 96 SCRA 454.
32. Id., 457; 459–460.
33. Philippine Airlines v. Santos, G.R. No. 77875, February 4, 1993, 218 SCRA 415.
34. Agustin v. Workmen's Compensation Commission , L-19957, September 29, 1964, 12 SCRA
55, 59.
35. L-25665, May 22, 1969, 28 SCRA 285.
36. Id., 298.
37. L-49678, June 29, 1979, 91 SCRA 265.
38. Id., 274.
39. L-38482, June 18, 1976, 71 SCRA 470.

40. Id., 480.
41. G.R. No. 52056, October 30, 1980, 100 SCRA 691.
42. Id., 698.
43. G.R. No. 54996, November 27, 1981, 109 SCRA 489.
44. Egyptair v. National Labor Relations Commission , G.R. No. 63185, February 27, 1987, 148
SCRA 125; Oliva v. National Labor Relations Commission, G.R. No. 57865, April 28, 1983,
121 SCRA 827; Visperas v. Inciong , G.R. No. 51299, December 29, 1982, 119 SCRA 476;
Bachiller v. National Labor Relations Commission , G.R. No. 51484, June 25, 1980, 98
SCRA 393.
45. Metro Port Service Inc. v. National Labor Relations Commission , G.R. Nos. 71632–33,
March 9, 1989, 171 SCRA 190.
46. G.R. No. 78993, June 22, 1988, 162 SCRA 441.
47. Id., 445, citing Natividad v. Workmen's Compensation Commission , L-42340, August 31,
1978, 85 SCRA 115, 119–120; and Luzon Surety Co. v. Beson , L-26865-66, January 30,
1970, 31 SCRA 313, 318. See also De Leon v. National Labor Relations Commission, G.R.
No. 52056, October 30, 1980, 100 SCRA 691.
48. G.R. No. 85014, March 22, 1991, 195 SCRA 526.
49. Id., 531; citing Century Textile Mills, Inc. v. National Labor Relations Commission , G.R. No.
77859, May 25, 1988, 161 SCRA 528, 535.
50. Nitto Enterprises v. National Labor Relations Commission , G.R. No. 114337, September 29,
1995, 248 SCRA 654; Pepsi-Cola Bottling Co. v. National Labor Relations Commission ,
G.R. No. 101900, June 23, 1992, 210 SCRA 277; De Vera v. National Labor Relations
Commission, G.R. No. 93070, August 9, 1991, 200 SCRA 439; Tingson v. National Labor
Relations Commission, G.R. No. 84702, May 18, 1990, 185 SCRA 498; Ruffy v. National
Labor Relations Commission, G.R. No. 84193, February 15, 1990, 182 SCRA 365; and
National Service Corp. v. National Labor Relations Commission , G.R. No. 69870,
November 29, 1988, 168 SCRA 122.
51. Batangas Laguna Tayabas Bus Company v. National Labor Relations Commission , G.R.
No. 94429, May 29, 1992, 209 SCRA 430,439.
52. Sajonas v. National Labor Relations Commission, L-49286, March 15, 1990, 183 SCRA 182.
53. 69 Phil. 635 (1940).
54. Id., 642–644; cited by Alliance of Democratic Free Labor Organization v. Laguesma , G.R.
No. 108625, March 11, 1996, 254 SCRA 565, 573–574; and Doruelo v. Commission on
Elections, G.R. No. 67746, November 21, 1984, 133 SCRA 376, 381–382.
55. Tribe, L., Constitutional Choices (Chapter 16. Refocusing the "State Action" Inquiry:
Separating State Acts from State Actors). Harvard University Press, 1985.
56. See Gunther, G. and Sullivan, K. Constitutional Law, 13th Ed. (Chapter 10. The Post — Civil
War Amendments and Civil Rights Legislation: Constitutional Restraints on Private
Conduct; Congressional Power to Implement Amendments). The Foundation Press,
Westbury, New York, 1997.
57. See Cohen, W. and Varat, J., Constitutional Law. Cases and Materials. 9th Ed. (Chapter 12.
Application of the Post Civil War Amendments to Private Conduct: Congressional Power
to Enforce the Amendments). The Foundation Press, Westbury, New York, 1993.
58. 341 U.S. 123 (1951).

59. Cited by Altschuler, B. and Sgroi, C., Understanding Law in a Changing Society. (Chapter 3.
Due Process of Law, 94). Prentice Hall, Inc., 1996.
60. Chemerinsky. E., Rethinking Sate Action., 80 Nw.U.L.Rev. 503, 535–546, 550–553 (1985),
citing Franz v. United States, 707 F.2d 582, 594 n. 45 (D.C.Cir. 1983).
61. Korten, When Corporations Rule the World, 54 (2002 ed).
62. Acceptance Speech for the Democratic Nomination for President, Philadelphia, June 27,
1936.

63. Korten, op. cit., 59.
64. See Hartmann, Unequal Protection: The Rise of Corporate Dominance and the Theft of
Human Rights.
65. Article II (Declaration of Principles and State Policies), Section 9 of the 1973 Constitution.
66. Article XIII (Social Justice and Human Rights), Section 3 of the 1987 Constitution.
67. G.R. No. 120009, September 13, 2001, 365 SCRA 124.
68. G.R. Nos. 56176-77, February 28, 1985, 135 SCRA 167, 175.
69. International Harvester Macleod v. Intermediate Appellate Court , G.R. No. 73287, May 18,
1987; citing D.M. Consunji, Inc. v. National Labor Relations Commission , G.R. No. 71459,
July 30, 1986, 143 SCRA 204; Kapisanan ng Manggagawa sa Camara Shoes v. Camara
Shoes, G.R. No. 50985, January 30, 1982, 111 SCRA 477.
70. 323 SCRA 445, 504–505, 523.
71. De Leon v. National Labor Relations Commission , G.R. No. 52056, October 30, 1980, 100
SCRA 691, 698.
72. Tolentino v. National Labor Relations Commission , G.R. No. 75380, July 31, 1987, 152
SCRA 724.
73. G.R. No. 68147, June 30, 1988, 163 SCRA 279.
74. Id., 284–285. See also Bondoc v. People's Bank and Trust Company , L-43835, March 31,
1981, 103 SCRA 599, 605.
75. L-34974, July 25, 1974, 58 SCRA 120.
76. Id., 131.
77. Juan Somavia, ILO Director-General, June 2001.
78. Octagesima Adveniens. An Apostolic Letter of His Holiness Pope Paul VI., citing Gaudium et
Spes, 25: AAS 67 (1966), p. 1089.
79. The Merchant of Venice.
80. Id., 503–504; 521.
PANGANIBAN, J., dissenting:
1. 380 Phil. 416, January 27, 2000.

2. "Art. 283. Closure of establishment and reduction of personnel. — The employer may also
terminate the employment of any employee due to the installation of labor saving
devices, redundancy, retrenchment to prevent losses or the closing or cessation or
operation of the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on the workers and
the [Department] of Labor and Employment at least one (1) month before the intended
date thereof. In case of termination due to the installation of labor saving devices or
redundancy, the worker affected thereby shall be entitled to a separation pay equivalent
to at least his one (1) month pay or to at least one (1) month pay for every year of
service whichever is higher. In case of retrenchment to prevent losses and in cases of
closures or cessation of operations of establishments or undertaking not due to serious
business losses or nancial reverses, the separation pay shall be equivalent to one (1)
month pay or to at least one-half (1/2) month pay for every year of service, whichever is
higher. A fraction of at least six (6) months shall be considered one (1) whole year."
3. "Art. 277. . . .
(b) Subject to the constitutional right of workers to security of tenure and their right to be
protected against dismissal except for a just and authorized cause and without prejudice
to the requirement of notice under Article 283 of this Code, the employer shall furnish the
worker whose employment is sought to be terminated a written notice containing a
statement of the causes for termination and shall afford the latter ample opportunity to
be heard and to defend himself with the assistance of his representative if he so desires
in accordance with company rules and regulations promulgated pursuant to guidelines
set by the Department of Labor and Employment. Any decision taken by the employer
shall be without prejudice to the right of the worker to contest the validity or legality of
his dismissal by ling a complaint with the regional branch of the National Labor
Relations Commission. The burden of proving that the termination was for a valid or
authorized cause shall rest on the employer. The Secretary of the Department of Labor
and Employment may suspend the effects of the termination pending resolution of the
dispute in the event of a prima facie nding by the appropriate o cial of the
Department of Labor and Employment before whom such dispute is pending that the
termination may cause a serious labor dispute or is in implementation of a mass lay-
off."
4. "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 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."
5. 170 SCRA 69, February 8, 1989.
6. Supra.
Separate Opinions
Separate Opinions
7. Pp. 531–547. See also my Separate Opinions in Better Buildings, Inc. v. NLRC , 347 Phil. 521,
535, December 15, 1997; and Del Val v. NLRC, 357 Phil. 286, 294, September 25, 1998.
8. "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 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."
9. "Art. 284. Disease as a ground for termination. — An employer may terminate the services of
an employee who has been found to be suffering from any disease and whose
continued employment is prohibited by law or is prejudicial to his health as well as to the
health of his co-employees: Provided, That he is paid separation pay equivalent to at
least one (1) month salary or to one-half (1/2) month salary for every year of service,
whichever is greater, a fraction of at least six (6) months being considered as one (1)
whole year."
10. Pepsi-Cola Bottling Co. v. NLRC, 210 SCRA 277, June 23, 1992; Bacus v. Ople, 217 Phil. 670,
October 23, 1984; Philippine National Bank v. Apalisok, 199 SCRA 92, July 12, 1991.
11. People v. Bocar , 138 SCRA 166, 170–171, August 16, 1985; People v. San Diego , 135 Phil.
514, December 24, 1968; People v. Sola , 191 Phil. 21, March 17, 1981; People v.
Dacudao, 170 SCRA 489, February 21, 1989; People v. Calo Jr ., 186 SCRA 620, June 18,
1990; People v. Burgos , 200 SCRA 67, August 2, 1991; People v. Parazo , 369 Phil. 398,
July 8, 1999 (Resolution on the Motion for Reconsideration).
12. Fabella v. Court of Appeals, 346 Phil. 940, November 28, 1997.
13. Villarosa v. Comelec, 377 Phil. 497, November 29, 1999.
14. §18, Art II, 1987 Constitution.
15. §3, Art. XIII, ibid.
16. 331 Phil. 476, 485, October 15, 1996, per Romero, J.
TINGA, J:
1. 380 Phil. 416 (2000).
2. Id.
3. Id. at 443, 445, 448.
4. Rollo, p. 42.
5. Id. at 32.
6. Ibid.
7. Id. at 59–60.
8. Id. at 15.
9. Id. at 34.
10. Id. at 92.
11. Id. at 91. The address indicated in the identi cation cards was "V 6 Cruz Iron Works, E.
Rodriguez Parañaque City."
12. Ibid citing PAL v. NLRC, 279 SCRA 533.

13. In a Decision dated 21 August 2000, penned by Commissioner V.R. Calaycay, and concurred
in by Presiding Commissioner R. Aquino and Commissioner A. Gacutan.
14. Rollo, p. 127.
15. Penned by Associate Justice M. Buzon, concurred in by Associate Justices J. Guevara-
Salonga and D. Pine.
16. In their Petition for Certiorari before the Court of Appeals, the Agabons particularly claimed
that they were required to work on four holidays, namely, Araw Ng Kagitingan, National
Heroes Day, Bonifacio Day, and Rizal Day. See Rollo, p. 154.
17. Deducted from Virgilio Agabon's thirteenth (13th) month pay were his SSS loan and
expenses for shoes. Rollo, pp. 171–172.
18. Rollo, p. 173.

19. Id. at 22.
20. Id. at 23 citing Kingsize Manufacturing Corporation v. NLRC, 238 SCRA 349.
21. Rollo, p. 20.
22. Palencia v. NLRC , G.R. No. L-75763, 21 August 1987; Pure Blue Industries v. NLRC , G.R. No.
115879, 16 April 1997.
23. Rollo, pp. 129, 170.
24. Both the NLRC and the Court of Appeals noted that the 10 June 1999 conference between
the Agabons and Riviera Homes was at the behest of the Agabons, thus countering the
claim of strained relations. Rollo, pp. 130, 170–171.
25. Rollo, p. 91.
26. Supra note 6.

27. Id.
28. Supra note 1.
29. Supra note 1 at 446.
30. See Section 1, Republic Act No. 1052, which states:
Sec. 1. In cases of employment, without a de nite period, in a commercial, industrial, or
agricultural establishment or enterprise, the employer or the employee may terminate at
any time the employment with just cause; or without just cause in the case of an
employee by serving written notice on the employer at least one month in advance, or in
the case of an employer, by serving such notice to the employee at least one month in
advance or one-half month for every year of service of the employee, whichever is longer,
a fraction of at least six months being considered as one whole year.
The employee, upon whom no such notice was served in case of termination of employment
without just cause shall be entitled to compensation from the date of termination of his
employment in an amount equivalent to his salaries or wages corresponding to the
required period of notice.
31. 124 Phil. 698 (1966).
32. Id. at 703.
33. 139 Phil. 747 (1969).
34. Id. at 754.
35. Serrano v. NLRC, supra note 1 at 447.
36. G.R. No. L-38482, 18 June 1976, 71 SCRA 470.

38. Serrano, supra note 1 at 445–446.
39. G.R. No. 81651, 18 January 1991, 193 SCRA 57.
40. Id. at 67.
41. See G. Gunther and K. Sullivan, Constitutional Law (14th ed.) at 867.
42. Separate Opinion of Justice Panganiban, p. 12.

43. See e.g., Morehead v. State of New York , 298 U.S. 587 (1936), which a rmed the invalidity
of minimum wage laws as previously declared in Adkins v. Children's Hospital , 261 U.S.
525 (1923).
44. Famously justi ed by the Supreme Court as an assertion of the "liberty of contract", or "the
right to contract about one's affairs", as contained in the Fourteenth Amendment. Adkins
v. Children's Hospital , 261 U.S. 525, 545. (1923). But as Justice Holmes famously
critiqued: "Contract is not specially mentioned in the text (of the Fourteenth Amendment)
that we have to construe. It is merely an example of doing what you want to do,
embodied in the word liberty. But pretty much all law consists in forbidding men to do
some things that they want to do, and contract is no more exempt from law than other
acts." Adkins v. Children's Hospital. Id. at 568.
45. See People v. Tudtud, G.R. No. 144037, 26 September 2003.
46. G.R. No. 106027, 234 SCRA 441, 25 July 1994.
47. Id. at 451–452.

48. 335 Phil. 82 (1997). The Court therein was divided, with twelve voting for, and three against
the decision. Interestingly, both Justices Puno and Panganiban adopted the dissenting
position that the provisions of Article XII of the Constitution alone were insu cient to
accord the Filipino bidder a preferential right to obtain the winning bid for Manila Hotel.
Their concession as to the enforceability of paragraph 2, Section 10, Article XII of the
Constitution without enabling legislation was in a situation wherein if the bids of the
Filipino and the foreign entity were tied. Id. at 154 (J. Puno, dissenting) and 154 (J.
Panganiban, dissenting).
49. Id. at 102 citing 16 AM JUR. 2d 281.
50. Id. at 103–104 citing 16 AM JUR 2d 283–284.
51. II RECORD OF THE CONSTITUTIONAL COMMISSION: PROCEEDINGS AND DEBATES 613.
52. Id. at 617.
53. Id. at 626.
54. Id. at 644.
55. The test suggested by Justice Puno in the Manila Hotel case, supra note 47, is as de nitive
as any proposed method of analysis could ever be. "A searching inquiry should be made
to nd out if the provision is intended as a present enactment, complete in itself as a
de nitive law, or if it needs future legislation for completion and enforcement. The
inquiry demands a micro-analysis and the context of the provision in question." J. Puno,
dissenting, id. at 141–142. See also Rev. Pamatong v. COMELEC , G.R. No. 161872, 13
April 2004.
56. J. BERNAS, THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES: A
COMMENTARY (1996), at 1064.
57. Article 3, Chapter I of the Labor Code declares:
Declaration of basic policy. — The State shall afford full protection to labor, promote full
employment, ensure equal work opportunities regardless of sex, race or creed, and
regulate the relations between workers and employers. The State shall assure the rights
of workers to self-organization, collective bargaining, security of tenure and just and
humane conditions of work.
58. See Phil. Aeolus Automotive United Corp. v. NLRC , 387 Phil 250 (2000); Gonzales v.
National Labor Relations Commission, 372 Phil 39 (1999); Jardine Davies v. National
Labor Relations Commission, 370 Phil 310 (1999); Pearl S. Buck Foundation v. National
Labor Relations Commission, G.R. No. 80728, February 21, 1990, 182 SCRA 446; Bagong
Bayan Corporation, Realty Investors & Developers v. National Labor Relations
Commission, G.R. No. 61272, September 29, 1989, 178 SCRA 107; Labajo v. Alejandro, et
al., G.R. No. L-80383, September 26, 1988, 165 SCRA 747; D.M. Consunji, Inc. v. Pucan, et
al., G.R. No. L-71413, March 21, 1988; 159 SCRA 107; Santos v. National Labor Relations
Commission, G.R. No. L-76271, September 21, 1987, 154 SCRA 166; People's Bank &
Trust Co. v. People's Bank & Trust Co. Employees Union , 161 Phil 15 (1976); Philippine
Movie Pictures Association v. Premiere Productions , 92 Phil. 843 (1953); Phil. Re ning
Co. v. Garcia, supra.
59. Serrano v. NLRC, supra note 1.
60. Section 2, Rule XXIII, Book V, OMNIBUS RULES IMPLEMENTING THE LABOR CODE.
61. Supra note 2.
63. G.R. No. 80587, 8 February 1989, 170 SCRA 69.
64. Serrano, supra note 1 at 453.
65. Serrano, supra note 1 at 485; J. Vitug, separate concurring and dissenting.
66. Balaquezon EWTU v. Zamora, G.R. No. L-46766-7, 1 April 1980, 97 SCRA 5, 8.
67. ". . . without prejudice, however, to whatever rights, bene ts, and privileges he may have
under the applicable individual or collective bargaining agreement with the employer or
voluntary employer policy or practice". Section 7, Rule 1, Book VI, Omnibus Rules
Implementing the Labor Code.
68. See Philippine Rabbit Bus Lines, Inc. v. NLRC , G.R. No. 98137, 15 September 1997, 279
SCRA 106, 115, citing cases.
69. Aguila v. CFI , G.R. No. L-48335, 15 April 1988, 160 SCRA 352, 360. "For all its conceded
merits, equity is available only in the absence of law and not as its replacement. Equity
is described as justice outside legality, which simply means that it cannot supplant
although it may, as often happens, supplement the law." Id.
70. 170 SCRA 69 (1989).
71. G.R. No. 112100, May 27, 1994, 232 SCRA 613.
72. BLACK'S LAW DICTIONARY, 1990 ed., p. 1133; citing Hidden Hollow Ranch v. Collins , 146
Mont. 321, 406 P.2d 365, 368.
73. 170 SCRA 69 (1989).
75. See e.g., Reta v. NLRC , G.R. No. 112100, 27 May 1994, 232 SCRA 613, wherein the Court
held that "private respondents should pay petitioner P10,000.00 as penalty for failure to
comply with the due process requirement." Id. at 618.
76. A. TOLENTINO, CIVIL CODE OF THE PHILIPPINES (1990 ed.), at 11; citing 9 Fabres 10.
77. Article 2221, Civil Code.
78. Ferrer v. NLRC , G.R. No. 100898, 5 July 1993; citing Callanta vs. Carnation Philippines, Inc.,
145 SCRA 268.
79. 347 Phil. 521, 531 (1997).
80. Id. at 531.
81. Id.
82. G.R. No. 121927, 22 April 1998.

83. G.R. No. 121698, 26 March 1998. The ponente in all three cases was Justice Flerida Ruth
Romero.
84. See Article 2216, Civil Code. See also Saludo v. Court of Appeals , G.R. No. 95536, 23 March
1992.
85. In relation to Article 2224 of the Civil Code, nominal damages are less than
temperate/moderate damages or compensatory damages.
86. See De la Paz, Jr. v. IAC, 154 SCRA 65; Chavez v. Gonzales, 32 SCRA 547.
87. See Art. 2199, Civil Code.
88. Art. 2225, Civil Code.
89. Page 16, Decision, citing jurisprudence.

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Agabon v. National Labor Relations Commission

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EN BANC

[G.R. No. 158693. November 17, 2004.]

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

1. Jenny M. Agabon — P56,231.93

2. Virgilio C. Agabon — 56,231.93

Respondent is further ordered to pay the complainants their holiday pay

I. For termination of employment based on just causes as de ned in Article

(a) A written notice served on the employee specifying the ground or

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(c) A written notice of termination served on the employee indicating that

Dismissals based on just causes contemplate acts or omissions attributable to the

The unfairness of declaring illegal or ineffectual dismissals for valid or authorized

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CD Technologies Asia, Inc. © 2018 cdasiaonline.com

PUNO , J., dissenting:

As the Wenphil indemnity doctrine has proved to be highly inimical to the

xxx xxx xxx

To an employee, a job is everything. Its loss involves terrible repercussions

Indeed, in light of the accelerated pace of Philippine industrialization then, the

To invoke the nebulous term "stable economy" to justify rejection of the

It shall guarantee the rights of all workers to self-organization, collective

The State shall promote the principle of shared responsibility between

Under Labor Relations (Book Five), Article 211 states —

(a) To promote and emphasize the primacy of free collective

(b) To promote free trade unionism as an instrument for the

(d) To promote the enlightenment of workers concerning their rights

. . . That point is well-taken. In the latest case in point, Meracap v.

2. the tribunal must consider the evidence presented;

3. the decision must have something to support itself;

5. the decision must be based on the evidence presented at the hearing, or

Accordingly, modern notions of violations of due process which may fairly be

Five. An employee who is denied procedural doe process is entitled to

Similarly, Section 2, Rule I (Termination of Employment and Retirement), Book VI

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In ne, if the employer's right to dismiss an employee is forfeited for his

As explained in my Dissenting Opinion in Serrano, the notice requirement nds basis

Respect for Due Process

The contrary conclusion arrived at by the Labor Arbiter as regards abandonment is

Under Section 1 of the Termination Pay Law, an employer could dismiss an

It is not di cult to be enraptured by novel legal ideas. Their characterization is

Further, Section 3, Article XIII states:

It shall guarantee the rights of all workers to self-organization, collective

The State shall promote the principle of shared responsibility between

In further discussing self-executing provisions, this Court stated that:

The Labor Code presents no textually demonstrable commitment to invalidate a

3. Id., pp. 13–14.

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22. G.R. No. 117040, 27 January 2000, 323 SCRA 445.

29. G.R. No. 122666, 19 June 1997, 274 SCRA 386.

40. Savellano v. Northwest Airlines, G.R. No. 151783, 8 July 2003.

2. G.R. No. 80587, February 8, 1989, 170 SCRA 69.

9. I J. Aruego, The Framing of the Philippine Constitution 147 (1936).

16. The welfare of the people is the supreme law.

28. Philippine Blooming Mills Employees Organization v. Philippine Blooming Mills Co ., L-

39. L-38482, June 18, 1976, 71 SCRA 470.

58. 341 U.S. 123 (1951).

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1. 380 Phil. 416, January 27, 2000.

12. Ibid citing PAL v. NLRC, 279 SCRA 533.

18. Rollo, p. 173.

26. Supra note 6.

36. G.R. No. L-38482, 18 June 1976, 71 SCRA 470.

42. Separate Opinion of Justice Panganiban, p. 12.

47. Id. at 451–452.