Lack of due process in dismissals due to just causes shall not nullify the same

but shall render the employer liable for damages.

Agabon v. NLRC
Facts:
The petitioners Jenny and Virgilio Agabon were employed as gypsum board and
cornice installers by Riviera Home Improvements, Inc. They were dismissed for
abandonment of work, so they filed a complaint for illegal dismissal and payment
of money claims.
The petitioners claim that the respondents failed to comply with the twin
requirements of notice and hearing. On the other hand, the respondent argues
that there was abandonment. It allegedly sent two letters to the petitioners last
known addresses, advising them to report for work. However, they still did not
report for work as they had subcontracted to perform work for another company.
The LA declared the dismissal illegal and ordered the respondent to pay the
petitioners their backwages and separation pay in lieu of reinstatement. On
appeal, the NLRC reversed the LA because it found that the petitioners
abandoned their work and were thus not entitled to backwages and separation
pay. The CA ruled that the dismissal was not illegal but ordered the payment of
the money claims.
Issues:
1) Whether or not there was a valid dismissal; and
2) Whether or not the procedures for dismissal were observed.
Held:
1) YES. Abandonment is the deliberate and unjustified refusal of an employee to
resume his employment. It is a form of neglect of duty, hence, a just cause for
termination of employment by the employer. 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 employeremployee 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.

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.
2) NO. Private respondent 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 employees last known address. Thus, it should be held liable
for non-compliance with the procedural requirements of due process. However,
the dismissal should be upheld because it was established that the petitioners
abandoned their jobs to work for another company.
Where the dismissal is for a just cause, 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. The
indemnity to be imposed should be stiffer to discourage the abhorrent practice of
dismiss now, pay later.

When the closure of business or cessation of operations is due to serious

business losses or financial reverses, duly proved, the employees are not
entitled to separation pay.
JAKA Food Processing vs. Pacot
Facts:
Pacot and other employees of JAKA were terminated from their employment
because of the corporations financial difficulties. However, JAKA failed to serve a
written notice upon the employees and the DOLE at least 1 month from the
intended date of termination. Thus, the employees filed a complaint for illegal
dismissal against the company.
The LA declared the termination illegal and ordered JAKA to reinstate the
respondents with their full backwages and separation pay if reinstatement is not
possible. The NLRC affirmed the LA at first, but upon MR, it ordered JAKA to pay
the respondents separation pay equivalent to one month salary plus damages for
failure to observe due process in the termination. The CA reversed NLRC and
ordered the payment of separation pay and the full backwages of the employees.
Issue:
Whether or not the employees are entitled to separation pay.
Held:
NO. in all cases of business closure or cessation of operation or undertaking of
the employer, the affected employee is entitled to separation pay. This is
consistent with the state policy of treating labor as a primary social economic
force, affording full protection to its rights as well as its welfare. The exception is
when the closure of business or cessation of operations is due to serious
business losses or financial reverses; duly proved, in which case, the right of
affected employees to separation pay is lost for obvious reasons.
However, because of JAKAs failure to observe the notice requirement, they were
ordered to pay damages.

An agreement between the employer and employee to extend the period of

probationary employment is valid.

Mariwasa Manufacturing vs. Leogardo Jr.

Facts:
Dequilla was hired as a probationary employee by Mariwasa. Upon the expiration
of 6 months, he was informed that he failed to meet the required standards but
they agreed to extend the probationary period for another 3 months. However, he
still failed to improve, so he was terminated upon the expiration of the period.
Dequila filed a case for illegal dismissal. The Ministry of Labor dismissed his
complaint. However, on appeal, Deputy Minister Leogardo Jr. held that Dequila
already became a regular employee and could not have been dismissed for
failure to meet company standards. He was ordered reinstated to his former
position without loss of seniority rights and with full backwages from the time of
dismissal until reinstatement.
Issue:
Whether or not the probationary period of employment may be extended beyond
six months, by agreement between the employer and employee.
Held:
YES. The extension of Dequila's probation was ex gratia, an act of liberality on
the part of his employer affording him a second chance to make good after
having initially failed to prove his worth as an employee. Such an act cannot now
unjustly be turned against said employer's account to compel it to keep on its
payroll one who could not perform according to its work standards. The law,
surely, was never meant to produce such an inequitable result.
By voluntarily agreeing to an extension of the probationary period, Dequila in
effect waived any benefit attaching to the completion of said period if he still
failed to make the grade during the period of extension. The Court finds nothing
in the law which by any fair interpretation prohibits such a waiver. And no public
policy protecting the employee and the security of his tenure is served by
prescribing voluntary agreements which, by reasonably extending the period of
probation, actually improve and further a probationary employee's prospects of
demonstrating his fitness for regular employment.
Parties to an employment contract may agree upon a probationary period of
employment which is longer than 6 months.

Buiser vs. Leogardo Jr.

Facts:
The petitioners were employed by General Telephone Company as probationary
employees. The contract provided that the probationary period shall be for 18
months from the date of employment. They were also given sales quotas.
When they failed to meet the quotas, they were terminated from employment. At
that time, they had already been working for a year with the company. Thus, the
petitioners filed a complaint for illegal dismissal, claiming to have attained regular
status. The RD of the Ministry of Labor dismissed the complaints. On appeal,
Leogardo Jr., held that the company was justified in requiring a longer period for
probation and that the ground for termination was valid.
Issues:
1) Whether or not the employer can require a probationary period longer than 6
months; and
2) Whether or not failure to meet sales quotas is a just cause for dismissal.
Held:
1) YES. Generally, the probationary period of employment is limited to 6 months.
The exception to this general rule is when the parties to an employment contract
may agree otherwise, such as when the same is established by company policy
or when the same is required by the nature of work to be performed by the
employee. In the latter case, there is recognition of the exercise of managerial
prerogatives in requiring a longer period of probationary employment, especially
where the employee must learn a particular kind of work such as selling, or when
the job requires certain qualifications, skills, experience or training.
2) Yes. In the case at bar, the petitioners' failure to meet the sales quota assigned
to each of them constitute a just cause of their dismissal, regardless of the
permanent or probationary status of their employment. Failure to observe
prescribed standards of work, or to fulfill reasonable work assignments due to
inefficiency may constitute just cause for dismissal. Such inefficiency is
understood to mean failure to attain work goals or work quotas, either by failing
to complete the same within the alloted reasonable period, or by producing
unsatisfactory results.
Engaging in pre-marital sexual relations and getting pregnant as a result thereof
does not amount to disgraceful or immoral conduct.
Leus vs. St. Scholasticas College

Facts:
Cheryll Santos Leus, the petitioner was hired by St. Scholasticas College
Westgrove (SSCW), a Catholic educational institution, as a non-teaching
personnel. She got pregnant out of wedlock, so the Directress formally asked her
to explain in writing why she should not be dismissed for engaging in pre-marital
sexual relations and getting pregnant as a result thereof. The same allegedly
constitutes serious misconduct for an employee of a Catholic school. Sr.
Quiambao contended that pursuant to the Manual of Regulation of Private
Schools (MRPS), disgraceful or immoral conduct is an additional ground for
dismissal aside from those provided in the Labor Code. Thus, Leus was
subsequently dismissed.
She filed a complaint for illegal dismissal. The LA upheld the dismissal, holding
that the pregnancy out of wedlock is considered as a disgraceful and immoral
conduct. The NLRC upheld this decision, which was also affirmed by the CA.
They based their decision on the provisions of the Manual of Regulation of
Private Schools.
Issue:
Whether or not the petitioners pregnancy out of wedlock is a valid ground for
termination.
Held:
NO. Pre-marital sexual relations between two consenting adults who have no
impediment to marry each other, and, consequently, conceiving a child out of
wedlock, gauged from a purely public and secular view of morality, does not
amount to a disgraceful or immoral conduct under the MRPS.
The labor tribunals erred in upholding the validity of the petitioners dismissal.
The labor tribunals arbitrarily relied solely on the circumstances surrounding the
petitioners pregnancy and its supposed effect on SSCW and its students without
evaluating whether the petitioners conduct is indeed considered disgraceful or
immoral in view of the prevailing norms of conduct. In this regard, the labor
tribunals respective haphazard evaluation of the evidence amounts to grave
abuse of discretion, which must be rectified.