G.R. No. 117040.

January 27, 2000

RUBEN SERRANO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and ISETANN DEPARTMENT
STORE, respondents.
J. Mendoza

FACTS:
Petitioner was hired by private respondent Isetann Department Store as a security checker to
apprehend shoplifters and prevent pilferage of merchandise. Initially hired on October 4, 1984 on
contractual basis, petitioner eventually became a regular employee on April 4, 1985. In 1988, he
became head of the Security Checkers Section of private respondent.
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-cuttingmeasure.
Serrano filed a complaint for Illegal Dismissal, illegal layoff, Unfair Labor Practice, underpaymentof
wages and nonpayment of salary and Over Time pay with the Labor Arbiter.

ISSUE:
Whether or not the hiring of an independent security agency by the private respondent to replace its
current security section a valid ground for the dismissal of the employees

HELD:
Under Art. 283, the employer may also terminate the employment of any employee due to the
installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or
cessation of operations of the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on the workers and the
Department of Labor and Employment at least one (1) month before the intended date thereof.

Not all notice requirements are requirements of due process. Some are simply part of a procedure to
be followed before a right granted to a party can be exercised. Others are simply an application of the
Justinian precept, embodied in the Civil Code, to act with justice, give everyone his due, and observe
honesty and good faith toward ones fellowmen. Such is the notice requirement in Arts. 282-283. The
consequence of the failure either of the employer or the employee to live up to this precept is to make
him liable in damages, not to render his act void. The measure of damages is the amount of wages the
employee should have received were it not for the termination of his employment without prior notice.
If warranted, nominal and moral damages may also be awarded. In the case at bar, there is only the
bare assertion of petitioner that, in abolishing the security section, private respondents real purpose
was to avoid payment to the security checkers of the wage increases provided in the collective
bargaining agreement approved in 1990. Such an assertion is not a sufficient basis for concluding that
the termination of petitioners employment was not a bona fide decision of management to obtain
reasonable return from its investment, which is a right guaranteed to employers under the
Constitution.

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 employees dismissal or
layoff. The first is that the Due Process Clause of the Constitution is a limitation on governmental
powers. It does not apply to the exercise of private power, such as the termination of employment
under the Labor Code. 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 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.

WHEREFORE, the petition is GRANTED and the resolution of the National Labor Relations Commission is
MODIFIED by ordering private respondent Isetann Department Store, Inc. to pay petitioner separation
pay equivalent to one (1) month pay for every year of service, his unpaid salary, and his proportionate
13th month pay and, in addition, full backwages from the time his employment was terminated on
October 11, 1991 up to the time the decision herein becomes final. For this purpose, this case is
REMANDED to the Labor Arbiter for computation of the separation pay, backwages, and other
monetary awards to petitioner.