JENNY M. AGABON, et al. v. NLRC

G.R. No. 158693

November 17, 2004

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 forallegedly 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. TheNLRC

reversed the LA, finding that the Agabons were indeed guilty of abandonment. TheCA 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 alreadywere 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 violationof 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. Whether the Agabons were il legall y dismissed

 No. There was just cause for their dismissal, i.e., abandonment. Art. 282 specifies the grounds for justdismissal, 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

employeed.  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. Whether Riviera violated the requirements of noti ce and hearing

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 toobserve 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.  I s the violation of the procedural requirements of notice and hearing for termination of employees a

violation of the Constitu tional due process?

 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 noticeand 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. What are the consequences of violating the procedural r equirements of termination?

The dismissal is valid, but Riviera should pay nominal damages to the Agabons in vindication of the latterfor 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:

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 begranted 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-savingdevices: 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 reinstatementwithout 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.