"SECTION 2. Standards of due process: requirements of notice.

— In all cases of
termination of employment, the following standards of due process shall be
substantially observed: chanrob1es virtual 1aw library

I. For termination of employment based on just causes as defined in Article 282 of the
Code: chanrob1es virtual 1aw library

(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 circumstance, 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.

II. For termination of employment as based on authorized causes defined in Article 283
of the Code, 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 at least thirty (30) days before the effectivity of the termination, specifying
the ground or grounds for termination." cralaw virtua1aw library

the better rule is to abandon the Serrano doctrine

To be sure, the Due Process Clause in Article III, Section 1 of the

Constitution embodies a system of rights based on moral principles so
deeply imbedded in the traditions and feelings of our people as to be
deemed fundamental to a civilized society as conceived by our entire history.
Due process is that which comports with the deepest notions of what is fair
and right and just.26 It is a constitutional restraint on the legislative as well
as on the executive and judicial powers of the government provided by the
Bill of Rights.

Due process under the Labor Code, like Constitutional due process, has two
aspects: substantive, i.e., the valid and authorized causes of employment
termination under the Labor Code; and procedural, i.e., the manner of
dismissal. Procedural due process requirements for dismissal are found in
the Implementing Rules of P.D. 442, as amended, otherwise known as the
Labor Code of the Philippines in Book VI, Rule I, Sec. 2, as amended by
Department Order Nos. 9 and 10. 27 Breaches of these due process
requirements violate the Labor Code. Therefore statutory due process should
be differentiated from failure to comply with constitutional due process.

Constitutional due process protects the individual from the government and
assures him of his rights in criminal, civil or administrative proceedings;
while statutory due process found in the Labor Code and Implementing Rules
protects employees from being unjustly terminated without just cause after
notice and hearing.

In Sebuguero v. National Labor Relations Commission,28 the dismissal was

for a just and valid cause but the employee was not accorded due process.
The dismissal was upheld by the Court but the employer was sanctioned.
The sanction should be in the nature of indemnification or penalty, and
depends on the facts of each case and the gravity of the omission committed
by the employer.

In Nath v. National Labor Relations Commission,29 it was ruled that even if

the employee was not given due process, the failure did not operate to
eradicate the just causes for dismissal. The dismissal being for just cause,
albeit without due process, did not entitle the employee to reinstatement,
backwages, damages and attorney's fees.

Mr. Justice Jose C. Vitug, in his separate opinion in MGG Marine Services,
Inc. v. National Labor Relations Commission,30 which opinion he reiterated in
Serrano, stated:

C. Where there is just cause for dismissal but due process has not been
properly observed by an employer, it would not be right to order either the
reinstatement of the dismissed employee or the payment of backwages to
him. In failing, however, to comply with the procedure prescribed by law in
terminating the services of the employee, the employer must be deemed to
have opted or, in any case, should be made liable, for the payment of
separation pay. It might be pointed out that the notice to be given and the
hearing to be conducted generally constitute the two-part due process
requirement of law to be accorded to the employee by the employer.
Nevertheless, peculiar circumstances might obtain in certain situations
where to undertake the above steps would be no more than a useless
formality and where, accordingly, it would not be imprudent to apply the res
ipsa loquitur rule and award, in lieu of separation pay, nominal damages to
the employee. x x x.31

After carefully analyzing the consequences of the divergent doctrines in the

law on employment termination, we believe that in cases involving
dismissals for cause but without observance of the twin requirements of
notice and hearing, the better rule is to abandon the Serrano doctrine and to
follow Wenphil by holding that the dismissal was for just cause but imposing
sanctions on the employer. Such sanctions, however, must be stiffer than
that imposed in Wenphil. By doing so, this Court would be able to achieve a
fair result by dispensing justice not just to employees, but to employers as
well.

The unfairness of declaring illegal or ineffectual dismissals for valid or

authorized causes but not complying with statutory due process may have
far-reaching consequences.

This would encourage frivolous suits, where even the most notorious
violators of company policy are rewarded by invoking due process. This also
creates absurd situations where there is a just or authorized cause for
dismissal but a procedural infirmity invalidates the termination. Let us take
for example a case where the employee is caught stealing or threatens the
lives of his co-employees or has become a criminal, who has fled and cannot
be found, or where serious business losses demand that operations be
ceased in less than a month. Invalidating the dismissal would not serve
public interest. It could also discourage investments that can generate
employment in the local economy.

The constitutional policy to provide full protection to labor is not meant to be

a sword to oppress employers. The commitment of this Court to the cause of
labor does not prevent us from sustaining the employer when it is in the
right, as in this case.32 Certainly, an employer should not be compelled to
pay employees for work not actually performed and in fact abandoned.

The employer should not be compelled to continue employing a person who

is admittedly guilty of misfeasance or malfeasance and whose continued
employment is patently inimical to the employer. The law protecting the
rights of the laborer authorizes neither oppression nor self-destruction of the
employer.33

It must be stressed that in the present case, the petitioners committed a

grave offense, i.e., abandonment, which, if the requirements of due process
were complied with, would undoubtedly result in a valid dismissal.

An employee who is clearly guilty of conduct violative of Article 282 should

not be protected by the Social Justice Clause of the Constitution. Social
justice, as the term suggests, should be used only to correct an injustice. As
the eminent Justice Jose P. Laurel observed, social justice must be founded
on the recognition of the necessity of interdependence among diverse units
of a society and of the protection that should be equally and evenly
extended to all groups as a combined force in our social and economic life,
consistent with the fundamental and paramount objective of the state of
promoting the health, comfort, and quiet of all persons, and of bringing
about "the greatest good to the greatest number."34

This is not to say that the Court was wrong when it ruled the way it did in
Wenphil, Serrano and related cases. Social justice is not based on rigid
formulas set in stone. It has to allow for changing times and circumstances.

Justice Isagani Cruz strongly asserts the need to apply a balanced approach
to labor-management relations and dispense justice with an even hand in
every case:

We have repeatedly stressed that social justice - or any justice for that
matter - is for the deserving, whether he be a millionaire in his mansion or a
pauper in his hovel. It is true that, in case of reasonable doubt, we are to tilt
the balance in favor of the poor to whom the Constitution fittingly extends
its sympathy and compassion. But never is it justified to give preference to
the poor simply because they are poor, or reject the rich simply because
they are rich, for justice must always be served for the poor and the rich
alike, according to the mandate of the law.35

Justice in every case should only be for the deserving party. It should not be
presumed that every case of illegal dismissal would automatically be decided
in favor of labor, as management has rights that should be fully respected
and enforced by this Court. As interdependent and indispensable partners in
nation-building, labor and management need each other to foster
productivity and economic growth; hence, the need to weigh and balance
the rights and welfare of both the employee and employer.

Where the dismissal is for a just cause, as in the instant case, 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, as ruled in Reta v. National Labor Relations
Commission.36 The indemnity to be imposed should be stiffer to discourage
the abhorrent practice of "dismiss now, pay later," which we sought to deter
in the Serrano ruling. The sanction should be in the nature of indemnification
or penalty and should depend on the facts of each case, taking into special
consideration the gravity of the due process violation of the employer.

Under the Civil Code, nominal damages is adjudicated in order that a right of
the plaintiff, which has been violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.