Agabon vs. National Labor Relations Commission

G.R. No. 158693. November 17, 2004

FACTS:

Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and installing ornamental and construction materials. It employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers on January 2, 19922 until February 23, 1999 when they were dismissed for abandonment of work.

Petitioners filed a complaint for illegal dismissal and payment of money claims. They asserted that they were dismissed because the private respondent refused to give them assignments unless they agreed to work on a “pakyaw” basis. They did not agree on this arrangement because it would mean losing benefits as Social Security System (SSS) members. They also claim that private respondent did not comply with the twin requirements of notice and hearing.

The private respondent maintained that petitioners were not dismissed but had abandoned their work. The petitioners are sent two letters to the last known addresses of the petitioners advising them to report for work. They also talk to Agabon by telephone to inform them of new assignment however did not report since they subcontracted for an installation work for another company.

The Labor Arbiter rendered a decision declaring the dismissals illegal and ordered private respondent to pay the monetary claims.

On appeal, the NLRC reversed the Labor Arbiter because it found that the petitioners had abandoned their work, and were not entitled to backwages and separation pay. It also denied petitioner’s motion for reconsideration.

The Court of Appeals in turn ruled that the dismissal of the petitioners was not illegal because they had abandoned their employment but ordered the payment of money claims

ISSUES:

(1) WON petitioners are illegally dismissed & shall be paid money claims which includes – backwages and separation pays.

(2) WON the Court of Appeals erred in holding that private respondent failed to pay petitioners’ holiday pay, service incentive leave pay and 13th month pay.

HELD:

(1) No. Termination is illegal only if it is not for any of the justified or authorized causes provided by law. To dismiss an employee, the law requires not only the existence of a just and valid cause but also enjoins the employer to give the employee the opportunity to be heard and to defend himself.

In this case, the dismissal is for just or authorized cause but due process was not observed. The petitioners committed a grave offense, i.e., abandonment, which, would undoubtedly result in a valid dismissal. Private respondent, however, 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. Thus, it should be held liable for noncompliance with the procedural requirements of due process.

The violation of the petitioners’ right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of the court, taking into account the relevant circumstances.

The constitutional policy to provide full protection to labor is not meant to be a sword to oppress employers. An employer should not be compelled to pay employees for work not actually performed and in fact abandoned. The law protecting the rights of the laborer authorizes neither oppression nor self-destruction of the employer.

Due Process Clause in Article III 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. 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.

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.

The violation of the petitioners’ right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of the court, taking into account the relevant circumstances.

(2) No. GR: One who pleads payment has the burden of proving it. Even where the employee must allege non-payment, the general rule is that the burden rests on the employer to prove payment, rather than on the employee to prove non-payment. The reason for the rule is that the pertinent personnel files, payrolls, records, remittances and other similar documents—which will show that overtime, differentials, service incentive leave and other claims of workers have been paid—are not in the possession of the worker but in the custody and absolute control of the employer.

If private respondent indeed paid petitioners’ holiday pay and service incentive leave pay, it could have easily presented documentary proofs of such monetary benefits to disprove the claims of the petitioners.

Notes:

Dismissals are based on:

(A) just causes  – contemplate acts or omissions attributable to the employee while dismissals based on authorized causes involve grounds under the Labor Code which allow the employer to terminate employees.

Procedurally, f the dismissal is based on a just cause under Article 282, the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment.

(B) an authorized cause requires requires payment of separation pay.

Procedurally – if the dismissal is based on authorized causes under Articles 283 and 284, the employer must give the employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his separation.

(C) illegal – reinstatement and full backwages are mandated under Article 279. If reinstatement is no longer possible where the dismissal was unjust, separation pay may be granted.

The dismissal should be upheld. While the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be held liable for non-compliance with the procedural requirements of due process.

Wenphil or Belated Due Process Rule. where the employer had a valid reason to dismiss an employee but did not follow the due process requirement, the dismissal may be upheld but the employer will be penalized to pay an indemnity to the employee.

Serrano  Doctrine. The violation by the employer of the notice requirement in termination for just or authorized causes was not a denial of due process that will nullify the termination. However, the dismissal is ineffectual and the employer must pay full backwages from the time of termination until it is judicially declared that the dismissal was for a just or authorized cause.

The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of the Omnibus Rules Implementing the Labor Code

Payment of backwages and other benefits, including reinstatement, is justified only if the employee was unjustly dismissed.

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