[G.R. No. 117040.

January 27, 2000]

RUBEN SERRANO, petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION and ISETANN
DEPARTMENT STORE, respondents.
FACTS
Ruben Serrano was the head of the security
checkers section of Isetann Department Store. He
was charged with the task of supervising security
checkers in their jobs (apprehending shoplifters
and preventing pilfirege of merchandise). On
October 11, 1991, the management sent him a
letter immediately terminating his services as
security section head, effective on the same day.
The reason given by the management was
retrenchment; they had opted to hire an
independent security agency as a cost-cutting
measure. Serrano filed a complaint for ID, illegal
layoff, ULP, underpayment of wages and
nonpayment of salary and OT pay with the LA.
The LA rendered a decision in favor of Serrano. It
stated that Isetann failed to establish that it had
retrenched its security division, that the petitioner
was not accorded due process, etc. and even
stated that the day after Serranos dismissal,
Isetann employed a safety and security supervisor
with similar duties to that of the former.
The NLRC on the other hand reversed the LA but
ordered Isetann to pay separation pay equivalent
to one month per year of service, unpaid salary, et
al. It held that the phase-out of the security section
was a valid exercise of management prerogative on
the part of Isetann, for which the NLRC cannot
substitute its judgment in the absence of bad faith
or abuse of discretion on the part of the latter; and
that the security and safety supervisors position
was long in place prior to Serranos separation
from the company, or the phase-out of the Security
Section.
ISSUE
Whether the petitioners dismissal was illegal.
RULING: Valid, but ineffectual (without legal
effect) payment of backwages, separation pay
and other monetary claims

No. The Court held that the dismissal was due to an

authorized cause under Art. 283 of the Labor Code,
i.e. redundancy. However, while an authorized
cause exists, Isetann failed to follow the procedural
requirement provided by Art. 283 of LC. For
termination due to authorized causes, the
employer must give a written notice of termination
to the employee concerned and to the DOLE at
least 30 days prior to its effectivity. This Isetann
failed to do.
The question now arises as to whether the failure
of Isetann to comply with the procedural
requirements renders the dismissal invalid, or, in
the event that it is valid, what the appropriate
sanction or penalty must be meted out.
Prior to the doctrine laid down in the decision
rendered in Wenphil Corp. NLRC in 1989, the
termination of an employee, even for just cause
but without following the requisite procedure,
renders such dismissal illegal, and therefore null
and void.
In the Wenphil doctrine, this was reversed; the said
rule was unjust to employers. Instead, the dismissal
was held to be still valid but the employer was
sanctioned by way of the payment of indemnity
(damages) in that case, P1,000. The amount of
indemnity will be depended on the circumstances
of each case, taking into account the gravity of the
offense committed by the employer.
Now, the Court once again examines the Wenphil
doctrine. Puno says that the effect of the Wenphil
doctrine was such that there has been a dismiss
now, pay later policy where the employers were
able to circumvent the procedural requisites of
termination, which is more convenient than the
compliance with the 30-day notice. Panganiban
said that the monetary sanctions were too
insignificant, niggardly, sometimes even late. Both
justices are of the opinion that the deprivation of
due process which must be accorded to the
employee renders the dismissal illegal. Puno
quoted that Legislative, Executive and Judicial
proceedings that deny due process do so under the
pain of nullity. Panganiban stated that such denial

of due process renders decisions and proceedings

void for lack of jurisdiction.
The present ruling of the Court held that the
dismissal of the employee is merely ineffectual,
not void. The dismissal was upheld but it is
ineffectual. The sanction provided was the
payment of backwages from the time of dismissal
up to the decision of the court finding just or
authorized cause. This was thought to balance the
interests of both parties, recognizing the
employees right to notice and at the same time
the right of the employer to dismiss for any of the
just and authorized causes.
The Court also responded to the arguments of
Justices Puno and Panganiban by stating that the
violation in the procedural requirement of
termination is not a denial of the fundamental right
to due process. This is because of the ff reasons:
1) The due process clause is a limitation on
governmental powers, inapplicable to the
exercise of private power, such as in this
case. The provision No person shall be
deprived of life, liberty and property
without due process of law pertains only
to the State, as only it has the authority to
do the same.
2) The purpose of the notice and hearing
under the Due process clause is to provide
an opportunity for the employee to be
heard before the power of the organized
society is brought upon the individual.
Under Art. 283, however, the purpose is to
give him time to prepare for the eventual
loss of his job and for DOLE to determine
whether economic causes exist to justify
termination. It is not to give opportunity to
be heard there is no charge against the
employee under Art. 283
3) The employer cannot be expected to be an
impartial judge of his own cause.
4) Not all notice requirements are requisites of
due process. Some are simply a part of a
procedure to be followed before a right
granted to party can be exercised; others
are an application of the Justinian precept.
Such is the case here. The failure of the
employer to observe a procedure for the

termination of employment which makes

the termination of employment merely
ineffectual.
5) Art. 279 of the LC provides that only
dismissal without just or authorized cause
renders such dismissal illegal. To consider
termination without observing procedural
reqts as also ID is to add another ground
for ID, thereby amending Art. 279.; Further,
there is a disparity in legal treatment, as
employees who resign without giving due
notice are only liable for damages; it does
not make their resignation void.
In this case, the separation pay was a distinct
award from the payment of backwages as a
way of penalty.
Petition was denied.

PHILIPPINE GEOTHERMAL, INC. vs. NATIONAL LAB

OR RELATIONS COMMISSION and EDILBERTO M. A
LVAREZ G.R. No. 106370, September 8, 1994
FACTS:
Alvarez having recovered from a work-related
accident, failed to report to work for a total of
eighteen (18) working days with three (3) days off.
Under petitioners company rules, employees who
incur unauthorized absences of six (6) days or more
are subject to dismissal. After the fourth warning,
he was then terminated. Private respondent filed
his complaint for illegal dismissal and the labor
arbiter rendered a decision holding private
respondents termination from employment as
valid and justified. On appeal, NLRC, reserved and
set aside the decision of the Labor Arbiter.
Petitioner was ordered to reinstate Edilberto M.
Alvarez to his former position without loss of
seniority rights but without backwages.
ISSUE:
Whether or not NLRC abused its discretion and
acted beyond its jurisdiction by entertaining an
appeal that was filed out of time / Termination of
Mr. Alvarez was valid and justified?

HELD:
On the issue of whether or not the appeal from the
decision of the labor arbiter to the NLRC was filed
within the ten (10) day reglementary period, it is
undisputed that private respondent received a
copy of the labor arbiters decision on 5 September
1991. Alvarez thus had up to 15 September 1991 to
perfect his appeal. Since this last mentioned date
was a Sunday, private respondent had to file his
appeal on the next business day, 16 September
1991. Petitioner contends that the appeal was filed
only on 20 September 1991. Respondent NLRC
however found that private respondent filed his
appeal by registered mail on 16 September 1991,
the same day that petitioners counsel was
furnished copies of said appeal.

Alvarez continued to incur unexplained absences

until his dismissal on 9 March 1990.
A review of Alvarez' record of attendance shows
that from August to December 1989, he reported
for work only seventy-seven (77) times while he
incurred forty-seven (47) absences.
An employee who earnestly desires to resume his
regular duties after recovering from an injury
undoubtedly will not go through the trouble of
getting opinions from five (5) different of getting
opinions from five (5) different physicians before
going back to work after he has been certified to be
fit to return to his regular duties.

On the issue of whether or not Edilberto M. Alvarez

was validly dismissed, we rule in the affirmative
and consequently the decision of respondent NLRC
is set aside.

Petitioner has not been shown to be without

sympathy or concern for Alvarez. He was given fifty
(50) days work-connected accident (WCA) leave
with pay to allow him to recuperate from his injury
without loss of earnings. He was allowed to use his
leave credits and was actually given an additional
fifteen (15) days WCA leave to allow him to consult
his doctors and fully recover from his injuries.
Moreover, petitioner gave Alvarez several warnings
to report for work, otherwise, he would face
disciplinary sanctions. In spite of these warnings,
Alvarez was absent without official leave (AWOL)
for eighteen (18) days. Under company policy, of
which Alvarez was made aware, employees who
incur without valid reason six (6) or more absences
are subject to dismissal.

Article 282(b) of the Labor Code provides that an

employer may validly dismiss an employee for
gross and habitual neglect by the employee of his
duties. In the present case, it is clear that private
respondent was guilty of seriously neglecting his
duties.

Petitioner, in its fourth and last warning letter to

Alvarez, was willing to allow him to resume his
work in spite of the eighteen (18) days he went on
AWOL. It was made clear, however, that should
private respondent still fail to report for work on 5
March 1990, his employment would be terminated.

The records establish that as early as 26 July 1989,

Dr. Leagogo already had certified that Alvarez
could perform light work. On 13 November 1989,

Private respondent failed to report for work on 5

March 1990. Petitioner validly dismissed him not
only for violation of company policy but also for
violation of Section 282(c) of the Labor Code
aforecited.

The contention that even assuming arguendo that

the appeal was filed on time, the appeal fee was
paid four (4) days late (and, therefore, the appeal
to the NLRC should be dismissed) likewise fails to
entirely empress us. In C.W. Tan Manufacturing v.
NLRC, we held that the broader interest of justice
and the desired objective of deciding the case on
the merits demand that the appeal be given due
course.

Dr. Leagogo certified that Alvarez could perform

moderate work and it was further certified that by
December 1989, Alvarez could return to his preinjury duties. Notwithstanding these certifications,

National Sugar Refineries Corporation

(NASUREFCO) vs. NLRC,NBSR Supervisory Union
(PACIWU) TUCP
G.R. No. 101761, March 24, 1993
FACTS:
Petitioner National Sugar Refineries Corporation
(NASUREFCO), is a corporation wholly owned and
controlled by the Government. On June 1, 1988,
petitioner implemented a Job Evaluation (JE)
program affecting all employees, from rank-and-file
to department heads. The JE program was
designed to rationalize the duties and functions of
all positions, reestablish levels of responsibility,
and recognize both wage and operational
structures. Ten years prior to the JE program,
members of the respondent labor union were
treated the same as rank-and-file employees and
as such, were entitled to overtime pay, rest day
and holiday pay pursuant to Arts. 87, 93, 94 of the
Labor Code as amended. After the JE program was
implemented, the following were made (1)
members of respondent labor union were reclassified under levels S5 to S8 which are
considered managerial staff for purposes of
compensation and benefits, (2) increase in pay of
an average of 50% of their basic pay,(3) longevity
pay increased on top of alignment adjustments,
(4)increase COLA, (5) grant of PHP 100 allowance
for rest day/holiday work. On May 11, 1990,
NASUREFCO recognized herein labor union
pursuant to RA 6715 allowing supervisory
employees to form their own unions. On June 20,
1990, herein labor union filed a complaint with
labor arbiter for non-payment of overtime, rest day
and holiday pay. Labor arbiter ruled in favor of
respondent labor union and affirmed by the NLRC.

ISSUE :
Are the members of respondent labor union
entitled to overtime, rest day and holiday pay?

RULING:
No, although it is undisputed that under Art. 212
(m) of the Labor Code, members of the respondent
labor union are considered supervisors, whose
basic function is to recommend managerial action
(hire, transfer, suspend, lay-off, recall, discharge,
assign or discipline employees) if such authority is
not merely routinary or clerical in nature but
requires the use of independent judgment. As
averred by petitioner, for purposes of determining
whether said labor union members are entitled to
overtime, rest and holiday pay, they are considered
officers or members of the managerial staff as
defined under Art. 82 of the Labor Code. The court
tips the scales in favor of petitioner. It is clear that
after the implementation of the JE program, the
members of the labor union were no longer
considered rank-and-file employees with regards to
the pay and benefits received as aforementioned
since they are now exempt from the coverage of
Art.82 of the Labor Code and hence, not entitled to
overtime, rest and holiday pay.