Agabon v. NLRC (2004) – Statutory Due Process

Agabon v. NLRC (2004) is regarding an illegal dismissal case of employees who abandoned their work but the employer was ordered to indemnify the employees due to the violation of Statutory Due Process.

The case may be recited in view of Constitutional Bill of Rights regarding due process or Statutory Due Process under Labor Law.

Related Tags:

  • Labor Code
  • Labor Law
  • Abandonment of Work
  • Due Process
  • Constitutional Due Process
  • Statutory Due Process.
  • Substantive Due Process
  • Procedural Due Process

Details of Decision

Reference Number:G.R. No. 158693
Date:November 17, 2004
SC Composition:En Banc
Action:Petition for Review on Certiorari


I. Facts

Jenny and Virgilio Agabon (Agabon), petitioners, filed a petition for review on certiorari to reverse the decision of the Court of Appeals which modified the decision of the National Labor Relations Commission (NLRC). Agabon et. al. was employed as gypsum board and cornice installers by Riviera Home Improvements, Inc. [Riviera], private respondent. Riviera is engaged in the business of selling and installing ornamental and construction materials.

Riviera sent two letters to the last known addresses of Agabon advising them to report for work. However, they did not report for work because they were subcontracted to work for another company. This resulted in Riviera dismissing Agabon for abandonment of work.

Agabon filed a complaint of illegal dismissal to the Labor Arbiter which declared that Agabon was illegally dismissed. On appeal, the National Labor Relations Commission (NLRC) reversed that decision as Agabon abandoned their work. Agabon raised the decision to the Court of Appeals (CA) upheld the decision of the NLRC. Agabon thus raised the matter to the Supreme Court (SC).

II. Issues

Whether Agabon's right to due process was violated and thereby was illegally dismissed

III. Ruling

Yes, Agabon's right to due process was violated and was therefore illegally dismissed from their employment.

Substantive and Procedural Process

The Labor Code requires that substantive and due process must be followed for a valid termination of employment.

Substantive Due Process requires that a just and valid cause for the termination and Procedural Due Process requires the employee to be given the opportunity to be heard and to defend himself.

Book VI, Rule I, Section 2(d) of the Omnibus Rules Implementing the Labor Code provides Procedural Due Process which requires the twin notice rule and hearing requirement. The procedure is if 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: a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of the decision to dismiss.

Abandonment of Work

Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is a form of neglect of duty, hence, a just cause for termination of employment by the employer.

For a valid finding of abandonment, these two factors should be present:

  1. Failure to report for work or absence without valid or justifiable reason; and
  2. Clear intention to sever employer-employee relationship, with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employees has no more intention to work.

The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified.

Differentiation between Constitutional and Statutory Due

Constitutional Due Process Clause stated in Sec. 1 Art. III 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. 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.

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.

Reinstatement due to Illegal Dismissal; no reinstatement but indemnification instead

Dismissals based on 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.

A termination for an authorized cause requires payment of separation pay. When the termination of employment is declared 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 SC ruled 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

Case at Bar

The SC held that Agabon abandoned their work which provides for a just and valid cause under Art. 282 (b) of the Labor Code regarding “Just Causes” for the termination of employment. However, Riviera violated the Statutory due process of Agabon.

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. Certainly, an employer should not be compelled to pay  employees for work not actually performed and in fact abandoned.

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,

IV. Fallo

WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of the Court of Appeals dated January 23, 2003, in CA-G.R. SP No. 63017, finding that petitioners' Jenny and Virgilio Agabon abandoned their work, and ordering private respondent to pay each of the petitioners holiday pay for four regular holidays from 1996 to 1998, in the amount of P6,520.00, service incentive leave pay for the same period in the amount of P3,255.00 and the balance of Virgilio Agabon's thirteenth month pay for 1998 in the amount of P2,150.00 is AFFIRMED with the MODIFICATION that private respondent Riviera Home Improvements, Inc. is further ORDERED to pay each of the petitioners the amount of P30,000.00 as nominal damages for non-compliance with statutory due process.

No costs.


Separate Opinions

Quisumbing, Carpio, Carpio-Morales, Callejo, Sr. and Azcuna, JJ ., concur.
Davide, Jr., C .J ., I join Mr. Justice Puno in his dissenting opinion.
Puno and Panganiban, JJ ., See dissenting opinion.
Sandoval-Gutierrez, J ., I join Justice Puno in his dissent.
Austria-Martinez, J ., I join in the separate opinion of Justice Tinga.
Corona, J ., is on leave.
Tinga, J ., In the result, per separate opinion.
Chico-Nazario, J ., I concur in J. Puno's dissenting opinion.
Garcia, J ., I join J. Puno's dissenting opinion.

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