CASE #2
[G.R. No. 158693 November 17, 2004]
VIRGILIO AGABON, et al. v. NLRC
FACTS
Virgilio and Jenny Agabon worked for respondent Riviera Home
Improvements, Inc. as gypsum and cornice installers from January 1992 until
Feb 1999. Their employment was terminated when they were dismissed for
allegedly abandoning their work. Petitioners Agabon then filed a case of
illegal dismissal. /// The LA ruled in favor of the spouses and ordered Riviera
to pay them their money claims. The NLRC reversed the LA, finding that the
Agabons were indeed guilty of abandonment. The CA modified the LA by
ruling that there was abandonment but ordering Riviera to pay the Agabons’
money claims.///
The arguments of both parties are as follows:
The Agabons claim, among others that Riviera violated the requirements of
notice and hearing when the latter did not send written letters of
termination to their addresses.
Riviera admitted to not sending the Agabons letters of termination to their
last known addresses because the same would be futile, as the Agabons do
not reside there anymore. However, it also claims that the Agabons
abandoned their work. More than once, they subcontracted installation
works for other companies. They already were warned of termination if the
same act was repeated, still, they disregarded the warning.
ISSUES
1. Whether the Agabons were illegally dismissed
2. Whether Riviera violated the requirements of notice and hearing
3. Is the violation of the procedural requirements of notice and hearing for
termination of employees a violation of the Constitutional due process?
4. What are the consequences of violating the procedural requirements of
termination?
RULING: Valid dismissal but violation of statutory due process = payment of
nominal damages (P30,000) & balance of 13th month pay, etc.
1. No. There was just cause for their dismissal, i.e., abandonment. Art. 282
specifies the grounds for just dismissal, to wit:
a. Serious misconduct or willful disobedience of the lawful orders of
the employer or his duly authorized representative in connection
with the employee’s work
b. Gross and habitual neglect of the by the employee of his duties
(includes abandonment)
c. Fraud or willful breach of the trust reposed by the employer or his
duly authorized representative to the employee
d. Commission of a crime or offense by the employee against the
person of the employer or any member of his immediate family or
his duly authorized representative
e. Any other causes analogous to the foregoing.
To establish abandonment, two elements must be present:
a. The unjustified failure of the employee to report for work
b. A clear intention to sever e-e relationship, manifested by overt acts
Here, the Agabons were frequently absent from work for having
performed installation work for another company, despite prior warning
given by Riviera. This clearly establishes an intention to sever the e-e
relationship between them, and which constitutes abandonment.
2. Yes. While the employer has the right to expect good performance,
diligence, good conduct and loyalty from its employees, it also has the
duty to provide just compensation to his employees and to observe the
procedural requirements of notice and hearing in the termination of
his employees.
Procedure of termination (Omnibus Rules Implementing the Labor
Code):
a. A written notice to the employee specifying the grounds for
termination and giving the employee reasonable opportunity to
be heard
b. A hearing where the employee is given the opportunity to
respond to the charges against him and present evidence or rebut
the evidence presented against him (if he so requests)
c. A written notice of termination indicating that grounds have been
established to justify his termination upon due consideration of all
circumstances
In this case, Riviera failed to notify the Agabons of their termination to
their last known addresses. Hence, they violated the procedural
requirement laid down by the law in the termination of employees.
3. No. Constitutional due process is that provided under the Constitution,
which involves the protection of the individual against governmental
oppression and the assurance of his rights In civil, criminal and
administrative proceedings; statutory due process is that found in the
Labor Code and its Implementing Rules and protects the individual from
being unjustly terminated without just or authorized cause after notice
and hearing.
The two are similar in that they both have two aspects: substantive due
process and procedural due process. However, they differ in that under
the Labor Code, the first one refers to the valid and authorized causes of
employment termination, while the second one refers to the manner of
dismissal. A denial of statutory due process is not the same as a denial of
Constitutional due process for reasons enunciated in Serrano v. NLRC.
4. The dismissal is valid, but Riviera should pay nominal damages to the
Agabons in vindication of the latter for violating their right to notice and
hearing. The penalty is in the nature of a penalty or indemnification, the
amount dependent on the facts of each case, including the nature of
gravity of offense of the employer.
In this case, the Serrano doctrine was re-examined.
First, in the Serrano case, the dismissal was upheld, but it was held to be
ineffectual (without legal effect). Hence, Serrano was still entitled to the
payment of his backwages from the time of dismissal until the
promulgation of the court of the existence of an authorized cause.
Further, he was entitled to his separation pay as mandated under Art.
283. The ruling is unfair to employers and has the danger of the
following consequences:
a. The encouragement of filing frivolous suits even by notorious
employees who were justly dismissed but were deprived of
statutory due process; they are rewarded by invoking due process
b. It would create absurd situations where there is just or authorized
cause but a procedural infirmity invalidates the termination, ie an
employee who became a criminal and threatened his co-workers’
lives, who fled and could not be faound
c. It could discourage investments that would generate employment
in the economy
Second, the payment of backwages is unjustified as only illegal
termination gives the employee the right to be paid full backwages.
When the dismissal is valid or upheld, the employee has no right to
backwages.
ADDITIONAL NOTES:
1. Dismissals based on just causes: acts or omissions attributable to
the employee; no right to claim backwages or to pay separation
pay (separation pay is subject to exception, ie if termination is not
based on serious misconduct or a conduct reflecting the moral
depravity of a person, separation pay may be granted by reason
of social justice)
Dismissals based on authorized causes: involve grounds provided
under the Labor Code; employee (and DOLE) is entitled the
payment of separation pay (redundancy and installation of labor-
saving devices: 1 month pay or 1 month/yr of service, whichever
is higher; retrenchment and closure or cessation of business: 1
month pay or ½ month per year of service, whichever is higher)
Illegal termination: employee is entitled to the payment of full
backwages as well as reinstatement without loss of seniority
rights and other privileges, inclusive of allowances and other
monetary claims from the time compensation was withheld until
reinstatement; if reinstatement is not possible, separation pay
shall be given.