WENPHIL SERRANO AGABON DOCTRINE Distinguished

THE DISMISSAL IS FOR A JUST OR AUTHORIZED CAUSE BUT DUE PROCESS WAS NOT OBSERVED.

Due Process to be Observed by The Employer - For termination of the employment based on the any of the just causes for
termination, the requirements of due process that an employer must comply with are: (TWIN NOTICES)

Written notice should be served to the employee specifying the ground or grounds for termination and giving the said employee
reasonable opportunity within which to explain;
A hearing or conference should be held during which the employee concerned, with the assistance of counsel, if the employee
so desires, is given the opportunity to respond to the charge, present his evidence and present the evidence presented against
him;
A written notice of termination, if termination is the decision of the employer, should be served on the employee indicating that
upon due consideration of all the circumstances, grounds have been established to justify his termination.
For termination of employment based on authorized causes, the requirements of due process shall be deemed complied with
upon service of a written notice to the employee and the appropriate Regional office of the Department of Labor and
employment at least thirty days before the effectivity of the termination specifying the grounds for termination.
NOTE:
Under the so-called WENPHIL DOCTRINE if the services of the employee was terminated due to a just or authorized cause
but the affected employee’s right to due process has been violated, the dismissal is legal but the employee is entitled to
damages by way of indemnification for the violation of the right.
SERRANO vs. ISETANN et. al. abandoned the WENPHIL DOCTRINE and ruled that if the employee is dismissed under just
or authorized cause but the affected employee’s right to due process has been violated, his dismissal becomes ineffectual.
Therefore, the employee is entitled to backwages from the time he was dismissed until the determination of the justness of
the cause of the dismissal.
AGABON vs. NLRC (Nov. 17, 2004) abandoned the Serrano doctrine and REINSTATED THE WENPHIL DOCTRINE. The
sanctions, however must be stiffer than that imposed in Wenphil.

Synopsis on the developments in the law.

In the last couple of decades, the Supreme Court has grappled with the legal effect and the corresponding sanction in cases
where there exists a just and valid ground to justify the dismissal but the employer fails to comply with the due process
requirement of the law. Prior to the promulgation in 1989 of Wenphil v. NLRC, [170 SCRA 69, February 8, 1989], the prevailing
doctrine held that dismissing employees without giving them proper notices and an opportunity to be heard was illegal and
that, as a consequence thereof, they were entitled to reinstatement plus full backwages. Wenphil abandoned this
jurisprudence and ruled that if the dismissal was for a just or an authorized cause but done without due process, the
termination was valid but the employer should be sanctioned with the payment of indemnity ranging from P1,000.00 to
P10,000.00.
In 2000, the Supreme Court promulgated Serrano v. NLRC, [G.R. No. 117040, January 27, 2000], which modified Wenphil. It
considered such termination “ineffectual” (not illegal) and sanctioned the employer with payment of full backwages plus
nominal and moral damages, if warranted by the evidence. In case the dismissal was for an authorized cause, separation pay
in accordance with Article 283 of the Labor Code should be awarded.

In 2004, the Supreme Court in Agabon v. NLRC, [G.R. No. 158693, November 17, 2004], abandoned Serrano and effectively
reverted to Wenphil (known also as the “Belated Due Process Rule”) and held that a dismissal due to abandonment - a just
cause - was not illegal or ineffectual, even if done without due process; but the employer should indemnify the employee with
“nominal damages for non-compliance with statutory due process.” (Glaxo Wellcome Phils., Inc. v. Nagkakaisang Empleyado
ng Wellcome-DFA, G.R. No. 149349, March 11, 2005).

JENNY M. AGABON and VIRGILIO C. AGABON, v NLRC RIVIERA HOME

IMPROVEMENTS, INC.

Petitioners are installer in Riviera Home Improvements, Inc. since 1992 until 1999 when they were dismissed.
Petitioners asserted that they were not given assignments when they refused to agree on a “pakyaw” basis for the fair
of losing their SSS benefits. They were dismissed without 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.
That petitioners did not report for work because they had subcontracted to perform installation work for another
company. Petitioners also demanded for an increase in their wage to P280.00 per day. When this was not granted,
petitioners stopped reporting for work and filed the illegal dismissal case.

Labor Arbiter rendered a decision declaring the dismissals illegal and ordered private respondent to pay the monetary
claims. On appeal, the NLRC reversed the Labor Arbiter because it found that the petitioners had abandoned their
work, and were not entitled to back wages and separation pay. 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.

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

The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of the Omnibus Rules
Implementing the Labor Code:
 Standards of due process: requirements of notice. – In all cases of termination of employment, the following
standards of due process shall be substantially observed:

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

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

(b) A hearing or conference during which the employee concerned, with the assistance of counsel if the
employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence
presented against him; and

(c) A written notice of termination served on the employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify his termination.

In case of termination, the foregoing notices shall be served on the employee's last known address.

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

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

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

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

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

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

The present case squarely falls under the fourth situation. The dismissal should be upheld because it was established
that the petitioners abandoned their jobs to work for another company. Private respondent, however, did not follow
the notice requirements and instead argued that sending notices to the last known addresses would have been
useless because they did not reside there anymore. Unfortunately for the private respondent, this is not a valid excuse
because the law mandates the twin notice requirements to the employee's last known address.21 Thus, it should be
held liable for non-compliance with the procedural requirements of due process.
The violation of the petitioners' right to statutory due process by the private respondent warrants the payment of
indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of the
court, taking into account the relevant circumstances.40 Considering the prevailing circumstances in the case at bar,
we deem it proper to fix it at P30,000.00. We believe this form of damages would serve to deter employers from future
violations of the statutory due process rights of employees. At the very least, it provides a vindication or recognition
of this fundamental right granted to the latter under the Labor Code and its Implementing Rules.

WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of the Court of Appeals dated January
23, 2003, in CA-G.R. SP No. 63017, finding that petitioners' Jenny and Virgilio Agabon abandoned their work, and
ordering private respondent to pay each of the petitioners holiday pay for four regular holidays from 1996 to 1998, in
the amount of P6,520.00, service incentive leave pay for the same period in the amount of P3,255.00 and the balance
of Virgilio Agabon's thirteenth month pay for 1998 in the amount of P2,150.00 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.

WENPHIL CORPORATION vs. NLRC AND ROBERTO MALLARE, respondents.

Once again the dismissal of an employee without affording him due process is brought to the attention of this Court
by this petition.

Private respondent was hired by petitioner on January 18, 1984 as a crew member at its Cubao Branch. He thereafter
became the assistant head of the Backroom department of the same branch. At about 2:30 P.M. on May 20, 1985
private respondent had an altercation with a co-employee, Job Barrameda, as a result of which he and Barrameda
were suspended on the following morning and in the afternoon of the same day a memorandum was issued by the
Operations Manager advising private respondent of his dismissal from the service in accordance with their Personnel
Manual. The notice of dismissal was served on private respondent on May 25, 1985.

Thus private respondent filed a complaint against petitioner for unfair labor practice, illegal suspension and illegal
dismissal. After submitting their respective position papers to the Labor Arbiter and as the hearing could not be
conducted due to repeated absence of counsel for respondent, the case was submitted for resolution. Thereafter a
decision was rendered by the Labor Arbiter on December 3, 1986 dismissing the complaint for lack of merit.

Private respondent appealed to the National Labor Relations Commission (NLRC) wherein in due course a decision
was rendered on October 16, 1987 setting aside the appealed decision and ordering the reinstatement of private
respondent to his former position without loss of seniority and other related benefits and one (1) year backwages
without qualification and deduction.

Hence the herein petition for certiorari with preliminary injunction and/or restraining order wherein petitioner alleges
that the public respondent NLRC committed a grave abuse of discretion in rendering its decision contrary to the
evidence on record.

On December 2, 1987, the court issued a restraining order as prayed for in the petition enjoining the enforcement of
the decision dated October 16, 1987 of public respondent NLRC upon petitioner posting a bond of P20,000.00.

The theory of the petitioner is that on the aforesaid date, May 20, 1985, when private respondent and Barrameda had
a misunderstanding about tending the Salad Bar, private respondent slapped Barrameda's cap, stepped on his foot
and picked up the ice scooper and brandished it against the latter. Marijo B. Kolimlim who was a management trainee
tried to pacify private respondent but he defied her so Kolimlim reported the incident to the assistant manager, Delilah
C. Hermosura, who immediately asked private respondent to see her. Private respondent refused to see Hermosura
and it took the security guard to bring him to her. Private respondent then shouted and uttered profane words instead
of making an explanation before her. He stated the matter should be settled only by him and Barrameda. The following
day Kolimlim and Hermosura submitted a report on the incident and recommended the imposition of the appropriate
penalties on both. It was the store manager who issued a report meting out the penalty of suspension on the two until
further notice in the following morning. Later that day the Operations Manager issued a memorandum advising
Barrameda of one (1) week suspension and the dismissal of private respondent from the service.

The main thrust of the petition is that under the Personnel Manual of petitioner which had been read and understood
by private respondent, private respondent waived his right to the investigation. It is provided therein that -

INVESTIGATION

If the offense is punishable with a penalty higher than suspension for fifteen (15) days, upon the
request of the erring employee, there shall be convened an investigation board composed of the
following

1. The Parlor Manager or Supervisor on duty when the incident occurred.

2. The General Manager or the Assistant Manager.

The investigation board shall discuss the merits of the case and shall issue a ruling, which shall be
final and conclusive. (p. 3, Personnel Manual: Emphasis supplied).

From the foregoing it appears that an investigation shall only be conducted if the offense committed by the employee
is punishable with the penalty higher than suspension of fifteen (15) days and the erring employee requests for an
investigation of the incident. Petitioner alleges that private respondent not having asked for an investigation he is thus
deemed to have waived his right to the same. Petitioner avers that immediately after the incident when private
respondent was asked to see Hermosura, he was defiant and showed that he was not interested to avail of an
investigation.

The contention of petitioner is untenable. The incident happened on May 20, 1985 and right then and there as afore
repeated on the following day private respondent was suspended in the morning and was dismissed from the service
in the afternoon. He received an official notice of his termination four (4) days later.

The defiant attitude of private respondent immediately after the incident amounted to insubordination. Nevertheless
his refusal to explain his side under the circumstances cannot be considered as a waiver of his right to an investigation.

Although in the Personnel Manual of the petitioner, it states that an erring employee must request for an investigation
it does not thereby mean that petitioner is thereby relieved of the duty to conduct an investigation before dismissing
private respondent. Indeed said provision of the Personnel Manual of petitioner which may effectively deprive its
employees of the right to due process is clearly against the law and hence null and void. The security of tenure of a
laborer or employee is enshrined in the Constitution, the Labor Code and other related laws. 1

Under Section 1, Rule XIV of the Implementing Regulations of the Labor Code, it is provided that "No worker shall be
dismissed except for just or authorized cause provided by law and after due process." Sections 2, 5, 6, and 7 of the
same rules require that before an employer may dismiss an employee the latter must be given a written notice stating
the particular act or omission constituting the grounds thereof; that the employee may answer the allegations within a
reasonable period; that the employer shall afford him ample opportunity to be heard and to defend himself with the
assistance of his representative, if he so desires; and that it is only then that the employer may dismiss the employee
by notifying him of the decision in writing stating clearly the reasons therefor. Such dismissal is without prejudice to
the right of the employee to contest its validity in the Regional Branch of the NLRC.

Petitioner insists that private respondent was afforded due process but he refused to avail of his right to the same;
that when the matter was brought to the labor arbiter he was able to submit his position papers although the hearing
cannot proceed due to the non-appearance of his counsel; and that the private respondent is guilty of serious
misconduct in threatening or coercing a co-employee which is a ground for dismissal under Article 283 of the Labor
Code.
The failure of petitioner to give private respondent the benefit of a hearing before he was dismissed constitutes an
infringement of his constitutional right to due process of law and equal protection of the laws. 2 The standards of due
process in judicial as well as administrative proceedings have long been established. In its bare minimum due process
of law simply means giving notice and opportunity to be heard before judgment is rendered. 3

The claim of petitioner that a formal investigation was not necessary because the incident which gave rise to the
termination of private respondent was witnessed by his co- employees and supervisors is without merit. The basic
requirement of due process is that which hears before it condemns, which proceeds upon inquiry and renders
judgment only after trial. 4

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

By the same token, the conclusion of the public respondent NLRC on appeal that private respondent was not afforded
due process before he was dismissed is binding on this Court. Indeed, it is well taken and supported by the records.
However, it can not justify a ruling that private respondent should be reinstated with back wages as the public
respondent NLRC so decreed. Although belatedly, private respondent was afforded due process before the labor
arbiter wherein the just cause of his dismissal bad been established. With such finding, it would be arbitrary and unfair
to order his reinstatement with back wages.

The Court holds that the policy of ordering the reinstatement to the service of an employee without loss of seniority
and the payment of his wages during the period of his separation until his actual reinstatement but not exceeding
three (3) years without qualification or deduction, when it appears he was not afforded due process, although his
dismissal was found to be for just and authorized cause in an appropriate proceeding in the Ministry of Labor and
Employment, should be re-examined. It will be highly prejudicial to the interests of the employer to impose on him the
services of an employee who has been shown to be guilty of the charges that warranted his dismissal from
employment. Indeed, it will demoralize the rank and file if the undeserving, if not undesirable, remains in the service.

Thus in the present case, where the private respondent, who appears to be of violent temper, caused trouble during
office hours and even defied his superiors as they tried to pacify him, should not be rewarded with re-employment and
back wages. It may encourage him to do even worse and will render a mockery of the rules of discipline that employees
are required to observe. Under the circumstances the dismissal of the private respondent for just cause should be
maintained. He has no right to return to his former employer.

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. 5 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.

WHEREFORE, the petition is GRANTED. The questioned decision of the public respondent NLRC dated October 16,
1987 for the reinstatement with back wages of private respondent is REVERSED AND SET ASIDE, and the decision
of the labor arbiter dated December 3, 1986 dismissing the complaint is revived and affirmed, but with the modification
that petitioner is ordered to indemnify private respondent in the amount of P1,000.00. The restraining order issued by
this Court on December 2, 1987 is hereby made permanent and the bond posted by petitioner is cancelled. This
decision is immediately executory.

SO ORDERED.