Standards of due process: requirements of notice.
– In all cases of
Agabon vs NLRC
GR 158693
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, 1992 until February 23, 1999 when they
were dismissed for abandonment of work. Thus, Petitioners then filed a
complaint for illegal dismissal and payment of money claims
Petitioners also claim that private respondent did not comply with the twin
requirements of notice and hearing. Private respondent, on the other hand,
maintained that petitioners were not dismissed but had abandoned their
work.
Issue: WON petitioners were illegally dismissed.
Held:
Accordingly, petitioners’ dismissal was for a just cause. They had
abandoned their employment and were already working for another
employer.
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.
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.
After establishing that the terminations were for a just and valid cause, we
now determine if the procedures for dismissal were observed.
The procedure for terminating an employee is found in Book VI, Rule I,
Section 2(d) of the Omnibus Rules Implementing the Labor Code:
termination of employment, the following standards of due process shall be
substantially observed:
For termination of employment based on just causes as defined in Article
282 of the Code:
1. 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;
1. 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 circumstances, 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.
Procedurally, (1) 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; and (2) 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.
From the foregoing rules four possible situations may be derived: (1) the
dismissal is for a just cause under Article 282 of the Labor Code, for an
authorized cause under Article 283, or for health reasons under Article 284,
and due process was observed; (2) the dismissal is without just or
authorized cause but due process was observed; (3) the dismissal is without
just or authorized cause and there was no due process; and (4) the
dismissal is for just or authorized cause but due process was not observed.
The present case squarely falls under the fourth situation. The dismissal
should be upheld because it was established that the petitioners abandoned
their jobs to work for another company. 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. Unfortunately for the private respondent, this is not a
valid excuse because the law mandates the twin notice requirements to the
employee’s last known address. Thus, it should be held liable for non-
compliance with the procedural requirements of due process.
Petition denied. CA affirmed with modifications.
JAKA FOOD vs. PACOT et al
G.R. No. 151378
March 28, 2005
FACTS: Respondents Pacot et al were earlier hired by petitioner JAKA
Foods Processing Corporation until the latter terminated their employment
because the corporation was “in dire financial straits”. It is not disputed,
however, that the termination was effected without JAKA complying with the
requirement under Article 283 of the Labor Code regarding the service of a
written notice upon the employees and the DOLE at least 1 month before
the intended date of termination.
In time, respondents separately filed with the regional Arbitration Branch of
the NLRC complaints for illegal dismissal, underpayment of wages and
nonpayment of SIL and 13th month pay against JAKA and its HRD
Manager.
ISSUE: is the dismissal valid, because of non-compliance with the notice
requirement?
HELD: the dismissal is legal, but employer should pay nominal damages for
non-compliance witht the notice requirement
In the case of Agabon vs. NLRC, the court had the opportunity to resolve a
similar question. Therein, we found that the employees committed a grave
offense, i.e., abandonment, which is a form of a neglect of duty which, in
turn, is one of the just causes enumerated under Article 282 of the Labor
Code. In said case, we upheld the validity of the dismissal despite non-
compliance with the notice requirement of the Labor Code. However, we
required the employer to pay the dismissed employees nominal damages for
non-compliance with statutory due process.
**
The difference between Agabon and the instant case is that in the former,
the dismissal was based on a just cause under Article 282 of the Labor
Code while in the present case, respondents were dismissed due to
retrenchment, which is one of the authorized causes under Article 283 of
the same Code.
A dismissal for just cause under Article 282 implies that the employee “The rule, therefore, is that in all cases of business closure or cessation of
concerned has committed, or is guilty of, some violation against the operation or undertaking of the employer, the affected employee is entitled
employer, i.e. the employee has committed some serious misconduct, is to separation pay. This is consistent with the state policy of treating labor as
guilty of some fraud against the employer, or, as in Agabon, he has a primary social economic force, affording full protection to its rights as well
neglected his duties. Thus, it can be said that the employee himself initiated as its welfare. The exception is when the closure of business or cessation
the dismissal process. of operations is due to serious business losses or financial reverses; duly
proved, in which case, the right of affected employees to separation pay is
On another breath, a dismissal for an authorized cause under Article 283 lost for obvious reasons. xxx”
does not necessarily imply delinquency or culpability on the part of the
employee. Instead, the dismissal process is initiated by the employer’s
exercise of his management prerogative, i.e. when the employer opts to
install labor saving devices, when he decides to cease business operations
or when, as in this case, he undertakes to implement a retrenchment
program.

Accordingly, it is wise to hold that: (1) if the dismissal is based on a

just cause under Article 282 but the employer failed to comply with the
notice requirement, the sanction to be imposed upon him should
be tempered because the dismissal process was, in effect, initiated by
an act imputable to the employee; and (2) if the dismissal is based on
an authorized cause under Article 283 but the employer failed to
comply with the notice requirement, the sanction should
be stiffer because the dismissal process was initiated by the
employer’s exercise of his management prerogative.

The records before us reveal that, indeed, JAKA was suffering from serious
business losses at the time it terminated respondents’ employment.

**

The clear-cut distinction between a dismissal for just cause under Article 282
and a dismissal for authorized cause under Article 283 is further reinforced
by the fact that in the first, payment of separation pay, as a rule, is not
required, while in the second, the law requires payment of separation pay.

We find the CA to have been in error when it ordered JAKA to pay

respondents separation pay equivalent to 1 month salary for every year of
service. This is because in Reahs Corporation vs. NLRC, we made the
following declaration:
FELIX B. PEREZ and AMANTE G. DORIA, Petitioners, vs PHILIPPINE
TELEGRAPH AND TELEPHONE COMPANY and JOSE LUIS
SANTIAGO, Respondents.
G.R. No. 152048; April 7, 2009
FACTS:
Petitioners Felix B. Perez and Amante G. Doria were employed by
respondent Philippine Telegraph and Telephone Company (PT&T) as
shipping clerk and supervisor, respectively, in PT&T’s Shipping Section,
Materials Management Group. Acting on an alleged unsigned letter
regarding anomalous transactions at the Shipping Section, respondents
formed a special audit team to investigate the matter. It was discovered that
the Shipping Section jacked up the value of the freight costs for goods
shipped and that the duplicates of the shipping documents allegedly showed
traces of tampering, alteration and superimposition.
Petitioners were placed on preventive suspension for 30 days for their
alleged involvement in the anomaly. Their suspension was extended for 15
days twice. Then in a Memorandum, petitioners were dismissed from the
service for having falsified company documents. Petitioners filed a complaint
for illegal suspension and illegal dismissal alleging that they were dismissed
on November 8, 1993, the date they received the above-mentioned
memorandum.
LA favored petitioners. NLRC reversed the decision of LA. Petitioners
appealed to CA. CA affirmed the NLRC decision insofar as petitioners’
illegal suspension for 15 days and dismissal for just cause were concerned.
However, it found that petitioners were dismissed without due process.
Petitioners now seek a reversal of the CA decision before the SC. They
contend that there was no just cause for their dismissal, that they were not
accorded due process and that they were illegally suspended for 30 days.
ISSUE:
Whether respondents were dismissed for just cause and with the
observance of due process.
RULING:
1. Respondents’ evidence is insufficient to clearly and convincingly
establish the facts from which the loss of confidence resulted. Other
than their bare allegations and the fact that such documents came into
petitioners’ hands at some point, respondents should have provided
evidence of petitioners’ functions, the extent of their duties, the
procedure in the handling and approval of shipping requests and the fact
that no personnel other than petitioners were involved. The alterations
on the shipping documents could not reasonably be attributed to
petitioners because it was never proven that petitioners alone had
control of or access to these documents.
Willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative is a just cause for termination. However, loss
of confidence should not be simulated. It should not be used as a subterfuge
for causes which are improper, illegal or unjustified. Loss of confidence may
not be arbitrarily asserted in the face of overwhelming evidence to the
contrary. It must be genuine, not a mere afterthought to justify an earlier
action taken in bad faith.
The burden of proof rests on the employer to establish that the dismissal is
for cause in view of the security of tenure that employees enjoy under the
Constitution and the Labor Code. The employer’s evidence must clearly and
convincingly show the facts on which the loss of confidence in the employee
may be fairly made to rest. It must be adequately proven by substantial
evidence. Respondents failed to discharge this burden.
Respondents’ illegal act of dismissing petitioners was aggravated by their
failure to observe due process. To meet the requirements of due process in
the dismissal of an employee, an employer must furnish the worker with 2
written notices: (1) a written notice specifying the grounds for termination
and giving to said employee a reasonable opportunity to explain his side and
(2) another written notice indicating that, upon due consideration of all
circumstances, grounds have been established to justify the employer’s
decision to dismiss the employee.
 Petitioners were neither apprised of the charges against them nor given a
chance to defend themselves. They were simply and arbitrarily separated
from work and served notices of termination in total disregard of their rights
to due process and security of tenure. Respondents failed to comply with the
two-notice requirement for terminating employees.
We note a marked difference in the standards of due process to be followed
as prescribed in the Labor Code and its implementing rules. The Labor Code
provides that an employer must provide the employee ample opportunity to
be heard and to defend himself with the assistance of his representative if
he so desires.
The omnibus rules implementing the Labor Code, on the other hand, require
a hearing and conference during which the employee concerned is given the
opportunity to respond to the charge, present his evidence or rebut the
evidence presented against him.
In case of conflict, the law prevails over the administrative regulations
implementing it. The authority to promulgate implementing rules proceeds
from the law itself. To be valid, a rule or regulation must conform to and be
consistent with the provisions of the enabling statute. As such, it cannot
amend the law either by abridging or expanding its scope.
Article 277(b) of the Labor Code provides that, in cases of termination for a
just cause, an employee must be given “ample opportunity to be heard and
to defend himself.” Thus, the opportunity to be heard afforded by law to the
employee is qualified by the word “ample” which ordinarily means
“considerably more than adequate or sufficient.” In this regard, the phrase
“ample opportunity to be heard” can be reasonably interpreted as extensive
enough to cover actual hearing or conference. To this extent, Section 2(d),
Rule I of the Implementing Rules of Book VI of the Labor Code is in
conformity with Article 277(b).
Nonetheless, Section 2(d), Rule I of the Implementing Rules of Book VI of
the Labor Code should not be taken to mean that holding an actual hearing
or conference is a condition sine qua non for compliance with the due
process requirement in termination of employment. The test for the fair
procedure guaranteed under Article 277(b) cannot be whether there has
been a formal pretermination confrontation between the employer and the
employee. The “ample opportunity to be heard” standard is neither
synonymous nor similar to a formal hearing.
The standard for the hearing requirement, ample opportunity, is couched in
general language revealing the legislative intent to give some degree of
flexibility or adaptability to meet the peculiarities of a given situation. To
confine it to a single rigid proceeding such as a formal hearing will defeat its
spirit.
Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code
itself provides that the so-called standards of due process outlined therein
shall be observed “substantially,” not strictly. This is a recognition that while
a formal hearing or conference is ideal, it is not an absolute, mandatory or
exclusive avenue of due process.
A hearing means that a party should be given a chance to adduce his
evidence to support his side of the case and that the evidence should be
taken into account in the adjudication of the controversy. “To be heard” does
not mean verbal argumentation alone inasmuch as one may be heard just
as effectively through written explanations, submissions or
pleadings. Therefore, while the phrase “ample opportunity to be heard” may
in fact include an actual hearing, it is not limited to a formal hearing only.
The existence of an actual, formal “trial-type” hearing, although preferred, is
not absolutely necessary to satisfy the employee’s right to be heard.
Due process of law simply means giving opportunity to be heard before
judgment is rendered. In fact, there is no violation of due process even if no
hearing was conducted, where the party was given a chance to explain his
side of the controversy. What is frowned upon is the denial of the opportunity
to be heard. Twin requirements of notice and hearing constitute the essential
elements of due process in the dismissal of employees. It is deemed
sufficient for the employer to follow the natural sequence of notice, hearing
and judgment.
In sum, the following are the guiding principles in connection with the
hearing requirement in dismissal cases:
(a) “ample opportunity to be heard” means any meaningful opportunity
(verbal or written) given to the employee to answer the charges against him
and submit evidence in support of his defense, whether in a hearing,
conference or some other fair, just and reasonable way.
(b) a formal hearing or conference becomes mandatory only when
requested by the employee in writing or substantial evidentiary disputes
exist or a company rule or practice requires it, or when similar circumstances
justify it.
(c) the “ample opportunity to be heard” standard in the Labor Code prevails
over the “hearing or conference” requirement in the implementing rules and
regulations.
On the other hand, an employee may be validly suspended by the employer
for just cause provided by law. Such suspension shall only be for a period of
30 days, after which the employee shall either be reinstated or paid his
wages during the extended period.
Where the dismissal was without just or authorized cause and there was no
due process, Article 279 of the Labor Code mandates that the employee is
entitled to reinstatement without loss of seniority rights and other privileges
and full backwages, inclusive of allowances, and other benefits or their
monetary equivalent computed from the time the compensation was not paid
up to the time of actual reinstatement. In this case, however, reinstatement
is no longer possible because of the length of time that has passed from the
date of the incident to final resolution. 14 years have transpired from the
time petitioners were wrongfully dismissed. To order reinstatement at this
juncture will no longer serve any prudent or practical purpose. So petitioners
will just be paid their separation pay.
Petition is hereby GRANTED.
ABBOTT CASE
FACTS:
On June 27, 2004, Abbott Laboratories, Philippines (Abbott) caused the
publication in a major broadsheet newspaper of its need for a Medical
and Regulatory Affairs Manager who would: (a) be responsible for drug
safety surveillance operations, staffing, and budget; (b) lead the development
and implementation of standard operating procedures/policies for drug safety
surveillance and vigilance; and (c) act as the primary interface with internal
and external customers regarding safety operations and queries.
Alcaraz – who was then a Regulatory Affairs and Information Manager
at Aventis Pasteur Philippines, Incorporated (another pharmaceutical
company like Abbott) – showed interest and submitted her application on
October 4, 2004.
On December 7, 2004, Abbott formally offered Alcaraz the above-mentioned
position which was an item under the company’s Hospira Affiliate Local
Surveillance Unit (ALSU) department.
In Abbott’s offer sheet, it was stated that Alcaraz was to be employed on
a probationary basis.
Later that day, she accepted the said offer and received an electronic mail (e-
mail) from Abbott’s Recruitment Officer, Teresita C. Bernardo (Bernardo),
confirming the same. Attached to Bernardo’s e-mail were Abbott’s
organizational chart and a job description of Alcaraz’s work.
On February 12, 2005, Alcaraz signed an employment contract which
stated that she was to be placed on probation for a period of six (6)
months beginning February 15, 2005 to August 14, 2005.
During Alcaraz’s pre-employment orientation, Allan G. Almazar, Hospira’s
Country Transition Manager, briefed her on her duties and responsibilities
as Regulatory Affairs Manager:
(a) she will handle the staff of Hospira ALSU and will directly report to Almazar
on matters regarding Hopira’s local operations, operational budget, and
performance evaluation of the Hospira ALSU Staff who are on probationary
status;
(b) she must implement Abbott’s Code of Good Corporate Conduct (Code of
Conduct), office policies on human resources and finance, and ensure that
Abbott will hire people who are fit in the organizational discipline;
(c) Kelly Walsh, Manager of the Literature Drug Surveillance Drug Safety of
Hospira, will be her immediate supervisor;
(d) she should always coordinate with Abbott’s human resource officers in the
management and discipline of the staff;
(e) Hospira ALSU will spin off from Abbott in early 2006 and will be officially
incorporated and known as Hospira, Philippines; and
(f) the processing of information and/or raw material data subject of Hospira
ALSU operations will be strictly confined and controlled under the computer
system and network being maintained and operated from the United States.
For this purpose, all those involved in Hospira ALSU are required to use two
identification cards: one, to identify them as Abbott’s employees and another,
to identify them as Hospira employees.
On March 3, 2005, Maria Olivia T. Yabut-Misa, Abbott’s Human
Resources (HR) Director, sent Alcaraz an e-mail which contained an
explanation of the procedure for evaluating the performance of
probationary employees and further indicated that Abbott had only one
evaluation system for all of its employees. Alcaraz was also given copies
of Abbott’s Code of Conduct and Probationary Performance Standards
and Evaluation (PPSE) and Performance Excellence Orientation
Modules (Performance Modules) which she had to apply in line with her
task of evaluating the Hospira ALSU staff.
Abbott’s PPSE procedure mandates that the job performance of a
probationary employee should be formally reviewed and discussed with
the employee at least twice: first on the third month and second on the fifth
month from the date of employment. The necessary Performance
Improvement Plan should also be made during the third-month review in
case of a gap between the employee’s performance and the standards
set. These performance standards should be discussed in detail with the
employee within the first two (2) weeks on the job. It was equally required
that a signed copy of the PPSE form must be submitted to Abbott’s
Human Resources Department (HRD) and shall serve as documentation
of the employee’s performance during his/her probationary period. This
shall form the basis for recommending the confirmation or termination of the
probationary employment.
On April 20, 2005, Alcaraz had a meeting with Cecille Terrible, Abbott’s
former HR Director, to discuss certain issues regarding staff
performance standards. In the course thereof, Alcaraz accidentally saw a
printed copy of an e-mail sent by Walsh to some staff members which
essentially contained queries regarding the former’s job performance.
Alcaraz asked if Walsh’s action was the normal process of evaluation.
Terrible said that it was not.
On May 16, 2005, Alcaraz was called to a meeting with Walsh and Terrible
where she was informed that she failed to meet the regularization
standards for the position of Regulatory Affairs Manager.
Thereafter, Walsh and Terrible requested Alcaraz to tender her
resignation, else they be forced to terminate her services. She was also
told that, regardless of her choice, she should no longer report for work
and was asked to surrender her office identification cards. She requested
to be given one week to decide on the same, but to no avail.
On May 17, 2005, Alcaraz told her administrative assistant, Claude Gonzales
(Gonzales), that she would be on leave for that day. However, Gonzales told
her that Walsh and Terrible already announced to the whole Hospira
ALSU staff that Alcaraz already resigned due to health reasons.
On May 23, 2005, Walsh, Almazar, and Bernardo personally handed to
Alcaraz a letter stating that her services had been terminated effective
May 19, 2005. The letter detailed the reasons for Alcaraz’s termination –
particularly, that Alcaraz:
(a) did not manage her time effectively;
(b) failed to gain the trust of her staff and to build an effective rapport with
them;
(c) failed to train her staff effectively; and
(d) was not able to obtain the knowledge and ability to make sound judgments
on case processing and article review which were necessary for the proper
performance of her duties.
Alcaraz felt that she was unjustly terminated from her employment and thus,
filed a complaint for illegal dismissal and damages against Abbott and its
officers, namely, Misa, Bernardo, Almazar, Walsh, Terrible, and Feist. She
claimed that she should have already been considered as a regular and
not a probationary employee given Abbott’s failure to inform her of the
reasonable standards for her regularization upon her engagement as
required under Article 295 of the Labor Code. In this relation, she
contended that while her employment contract stated that she was to be
engaged on a probationary status, the same did not indicate the standards
on which her regularization would be based. She further averred that the
individual petitioners maliciously connived to illegally dismiss her when:
(a) they threatened her with termination;
(b) she was ordered not to enter company premises even if she was still an
employee thereof; and
(c) they publicly announced that she already resigned in order to humiliate
her.
Abbott maintained that Alcaraz was validly terminated from her probationary
employment given her failure to satisfy the prescribed standards for her
regularization which were made known to her at the time of her engagement.
The Labor Arbiter ruled in Abbott’s favor. The NLRC reversed, upholding
Alcaraz’s allegations. The CA affirmed the NLRC decision.
WON Alcaraz was validly terminated from her employment
MAJORITY: NO. Abbott failed to follow the above-stated procedure in
evaluating Alcaraz. For one, there lies a hiatus of evidence that a signed copy
of Alcaraz’s PPSE form was submitted to the HRD. It was not even shown
that a PPSE form was completed to formally assess her performance. Neither
was the performance evaluation discussed with her during the third and fifth
months of her employment. Nor did Abbott come up with the necessary
Performance Improvement Plan to properly gauge Alcaraz’s performance with
the set company standards.
The Court modified Agabon v. NLRC in the case of Jaka Food Processing
Corporation v. Pacot where it created a distinction between procedurally
defective dismissals due to a just cause, on one hand, and those due to an
authorized cause, on the other.
If the dismissal is based on a just cause under Article 296 of the Labor
Code but the employer failed to comply with the notice requirement, the
sanction to be imposed upon him should be tempered because the
dismissal process was, in effect, initiated by an act imputable to the
employee
If the dismissal is based on an authorized cause under Article 297 but the
employer failed to comply with the notice requirement, the sanction
should be stiffer because the dismissal process was initiated by the
employer’s exercise of his management prerogative.
Alcaraz’s dismissal proceeded from her failure to comply with the
standards required for her regularization. As such, it is undeniable that
the dismissal process was, in effect, initiated by an act imputable to the
employee, akin to dismissals due to just causesunder Article 296 of the
Labor Code. Therefore, the Court deems it appropriate to fix the amount of
nominal damages at the amount of P30,000.00, consistent with its rulings in
both Agabon and Jaka.
DISSENT (Brion, J.): YES. Alcaraz was dismissed as she “failed to qualify as
regular employee in accordance with the prescribed standards set by the
Company.” Even granting for the sake of argument that Abbott had apprised
Alcaraz of an applicable performance standard, the evidence failed to show
that Alcaraz did not meet this standard in a manner and to the extent
equivalent to the “just cause” that the law requires.
In defense of Abbott’s failure to observe the two-notice requirement, the
ponencia argues that a different procedure applies when terminating a
probationary employee; the usual two-notice requirement does not govern,
citing for this purpose Section 2, Rule I, Book VI of the Implementing Rules of
the Labor Code. The ponencia, however, forgets that the single notice rule
applies only if the employee is validly on probationary basis; it does not
apply where the employee is deemed a regular employee for the
company’s failure to provide and to communicate a prescribed
performance standard applicable to the probationary employee.
KING OF KINGS TRANSPORT INC., CLAIRE DELA FUENTE and
MELISSA LIM, petitioners,
vs.
SANTIAGO O. MAMAC, respondent.
FACTS: Petitioner KKTI is a corporation engaged in public transportation
and managed by Claire Dela Fuente and Melissa Lim. Respondent was a
conductor for Don Mariano Transit Corporation (DMTC). He was one of the
few people who established Damayan ng mga Manggagawa, Tsuper at
Conductor-Transport Workers Union. Pending the union’s certification
election, respondent was transferred to KKTI. The KKTI employees later
organized the Kaisahan ng mga Kawani sa King of Kings (KKKK) which was
registered with DOLE. Respondent was elected KKKK president.
Upon audit of the October 28, 2001 Conductor’s Report of respondent, KKTI
noted an irregularity. It discovered that respondent declared several sold
tickets as returned tickets causing KKTI to lose an income of eight hundred
and ninety pesos. While no irregularity report was prepared on the October
28, 2001 incident, KKTI nevertheless asked respondent to explain the
discrepancy. In his letter, respondent said that the erroneous declaration in
his October 28, 2001 Trip Report was unintentional. He explained that
during that day’s trip, the windshield of the bus assigned to them was
smashed; and they had to cut short the trip in order to immediately report the
matter to the police. As a result of the incident, he got confused in making
the trip report.
On November 26, 2001, respondent received a letter terminating his
employment effective November 29, 2001. The dismissal letter alleged that
the October 28, 2001 irregularity was an act of fraud against the company.
KKTI also cited as basis for respondent’s dismissal the other offenses he
allegedly committed since 1999.
After that, he filed an action for illegal dismissal, among other claims. He
denied committing any infraction and alleged that his dismissal was intended
to bust union activities. Moreover, he claimed that his dismissal was effected
without due process.
KKTI averred that it had observed due process in dismissing respondent and
maintained that respondent was not entitled to his money claims such as
service incentive leave and 13th-month pay because he was paid on
commission or percentage basis.
LABOR ARBITER: he was validly dismissed
NLRC: Affirmed. CA held that there was just cause for respondent’s
dismissal. It ruled that respondent’s act in “declaring sold tickets as returned
tickets x x x constituted fraud or acts of dishonesty justifying his dismissal.”
ISSUE: WON respondent was given due process (procedural)
HELD: NO. There was failure to observe the requirements of due process
Due process under the Labor Code involves two aspects: first, substantive–
–the valid and authorized causes of termination of employment under the
Labor Code; and second, procedural––the manner of dismissal.
Section 2(d) of Rule I of Book VI of the Omnibus Rules Implementing
the Labor Code provides:
SEC. 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:
1. For termination of employment based on just causes as defined in
Article 282 of the Code:
(a) A written notice served on the employee specifying the ground or
grounds for termination, and giving 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 he so desires is given opportunity to respond to the
charge, present his evidence, or rebut the evidence presented against him.
(c) A written notice of termination served on the employee, indicating that
upon due consideration of all the circumstances, grounds have been
established to justify his termination.
1. The first written notice to be served on the employees should contain
the specific causes or grounds for termination against them, and a
directive that the employees are given the opportunity to submit their
 written explanation within a reasonable period. “Reasonable opportunity” No hearing was conducted. Regardless of respondent’s written
under the Omnibus Rules means every kind of assistance that explanation, a hearing was still necessary in order for him to clarify and
management must accord to the employees to enable them to prepare present evidence in support of his defense. Moreover, respondent made the
adequately for their defense.15 This should be construed as a period of letter merely to explain the circumstances relating to the irregularity in his
at least five (5) calendar days from receipt of the notice to give the October 28, 2001 Conductor’s Trip Report. He was unaware that a dismissal
employees an opportunity to study the accusation against them, consult proceeding was already being effected. Thus, he was surprised to receive
a union official or lawyer, gather data and evidence, and decide on the the November 26, 2001 termination letter indicating as grounds, not only his
defenses they will raise against the complaint. Moreover, in order to October 28, 2001 infraction, but also his previous infractions.
enable the employees to intelligently prepare their explanation and
defenses, the notice should contain a detailed narration of the facts and
circumstances that will serve as basis for the charge against the
employees. A general description of the charge will not suffice. Lastly,
the notice should specifically mention which company rules, if any, are
violated and/or which among the grounds under Art. 282 is being
charged against the employees.

2. After serving the first notice, the employers should schedule and
conduct a hearing or conference wherein the employees will be given
the opportunity to: (1) explain and clarify their defenses to the charge
against them; (2) present evidence in support of their defenses; and (3)
rebut the evidence presented against them by the management. During
the hearing or conference, the employees are given the chance to
defend themselves personally, with the assistance of a representative or
counsel of their choice. Moreover, this conference or hearing could be
used by the parties as an opportunity to come to an amicable
settlement.

3. After determining that termination of employment is justified, the

employers shall serve the employees a written notice of termination
indicating that: (1) all circumstances involving the charge against the
employees have been considered; and (2) grounds have been
established to justify the severance of their employment.

Respondent was not issued a written notice charging him of committing an

infraction. A verbal appraisal of the charges against an employee does not
comply with the first notice requirement.

The court observed from the irregularity reports against respondent for his
other offenses that such contained merely a general description of the
charges against him. The reports did not even state a company rule or policy
that the employee had allegedly violated.