Wenphil Corporation Vs Nlrc.docx

WENPHIL CORPORATION VS NLRC GANCAYCO, J.: FACTS: Private respondent Mallare had an altercation with a co-employee. The following day, the Operations Manager served them memorandum of suspension and in the afternoon of that same day, Mallare was dismissed from work. Labor Arbiter dismissed Mallare’s petition for unfair labor practice for lack of merit. NLRC reversed the decision and ordered the reinstatement of Mallare with full backwages of one year without qualification and deduction. ISSUE: Whether or not an employee dismissed for just cause but without due process be reinstated to work. RULING: The basic requirement of due proves is that which hears before it condemns, proceeds upon inquiry and renders judgment only after trial. The dismissal of an employee must be for a just cause and after due process. Petitioner committed an infraction of the second requirement thus it must be imposed a sanction for its failure to give a formal notice and conduct an investigation as required by law before dismissing Mallare from employment.Petitioner must indemnify the dismissed employee which depends on the facts of each case and the gravity of the omission committed by the employer. Where the private respondent appears to be of violent temper, caused trouble during office hours and even defied his supervisors as they tried to pacify him, he should not be rewarded with re-employment and backwages. The dismissal of the respondent should be maintained.

GRN 117040 JANUARY 27, 2000 SERRANO VS NLRC / ISETANN MENDOZA, J.: FACTS: Serrano was a regular employee of Isetann Department Store as the head of Security Checker. In 1991, as a cost-cutting measure, Isetann phased out its entire security section and engaged the services of an independent security agency. Petitioner filed a complaint for illegal dismissal among others. Labor arbiter ruled in his favor as Isetann failed to establish that it had retrenched its

security section to prevent or minimize losses to its business; that private respondent failed to accord due process to petitioner; that private respondent failed to use reasonable standards in selecting employees whose employment would be terminated. NLRC reversed the decision and ordered petitioner to be given separation pay. ISSUE: Whether or not the hiring of an independent security agency by the private respondent to replace its current security section a valid ground for the dismissal of the employees classed under the latter. RULING: An employer’s good faith in implementing a redundancy program is not necessarily put in doubt by the availment of the services of an independent contractor to replace the services of the terminated employees to promote economy and efficiency. Absent proof that management acted in a malicious or arbitrary manner, the Court will not interfere with the exercise of judgment by an employer. If termination of employment is not for any of the cause provided by law, it is illegal and the employee should be reinstated and paid backwages. To contend that even if the termination is for a just cause, the employee concerned should be reinstated and paid backwages would be to amend Art 279 by adding another ground for considering dismissal illegal. If it is shown that the employee was dismissed for any of the causes mentioned in Art 282, the in accordance with that article, he should not be reinstated but must be paid backwages from the time his employment was terminated until it is determined that the termination of employment is for a just cause because the failure to hear him before he is dismissed renders the termination without legal effect.

GRN 158693 NOVEMBER 17, 2004 AGABON VS NLRC / RIVIERA HOME YNARES-SANTIAGO, J.: FACTS: Petitioners were employed by Riviera Home as gypsum board and cornice installers from January 1992 to February 23, 1999 when they were dismissed for

abandonment of work.Petitioners filed a complaint for illegal dismissal and was decided in their favor by the Labor Arbiter. Riviera appealed to the NLRC contending just cause for the dismissal because of petitioner’s abandonment of work. NLRC ruled there was just cause and petitioners were not entitled to backwages and separation pay. The CA in turn ruled that the dismissal was not illegal because they have abandoned their work but ordered the payment of money claims. ISSUE: Whether or not petitioners were illegally dismissed. RULING: To dismiss an employee, the law required not only the existence of a just and valid cause but also enjoins the employer to give the employee the right to be heard and to defend himself. Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. For a valid finding or abandonment, two factors are considered: failure to report for work without a valid reason; and, a 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. 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. This became known as the Wenphil Doctrine of the Belated Due process Rule. Art 279 means that the termination is illegal if it is not for any of the justifiable or authorized by law. Where the dismissal is for a just cause, the lack of statutory due process should not nullify the dismissal but the employer should indemnify the employee for the violation of his statutory rights. The indemnity should be stiffer to discourage the abhorrent practice of “dismiss now, pay later” which we sought to deter in Serrano ruling.The violation of employees’ rights warrants the payment of nominal damages.

In the dismissal of an employee, the requirements of substantive and procedural due process have to be complied with. The first means that there should be a cause for the dismissal; while the second pertains to affording the employee the opportunity to be heard. It is well settled that in the absence of both requirements, or if the dismissal is bereft of any cause, there is illegal dismissal. With respect, however, to a situation where there is cause but the employer did not afford the employee the right to be heard,

the Supreme Court has continuously modified its stand in its effort to balance the rights and interests of the employer and the employee.

Prior to 1989, the rule was that, if the employer did not comply with procedural due process, as for, instance, it did not give the employee a show-cause notice apprising him of the charges against him, the dismissal is illegal, whether or not there was just cause. The reliefs granted to the employee are reinstatement without loss of seniority rights and payment of backwages.

In February 1989, the Supreme Court came up with a doctrine which was euphemistically called and assailed, mostly by workers, as the "dismiss now, pay later" doctrine. In Wenphil Corporation vs. NLRC,it was ruled that where there is a cause for the dismissal of an employee, the same is valid even if he was not afforded the right to due process. In this case, the employee was not given a show-cause notice, and he was not even given the opportunity to explain his side. Since the dismissal was valid, the employee was held not to be entitled to reinstatement and backwages. However, the employer was made liable to pay indemnity in the form of a penalty or fine in the measly amount of P1,000. Subsequent cases followed this ruling but the amount of penal indemnity varied from P1,000 to 10,000 depending on the circumstances of each case.

More than a decade after, the Supreme Court developed another doctrine, which modified, not really reversed, the Wenphil doctrine. This is the case of Serrano vs. NLRC which involved a security guard in one department store. There was authorized cause for the separation of the guard but the employer did not comply with procedural due process. The High Court labeled the dismissal as ineffectual. This was just toying with semantics because like the preceding case, the employee was not entitled to reinstatement considering that there was a cause for his separation. Similarly, the employer had to pay the employee for infringing on his right to due process. However, instead of the usual penalty imposed against the employer, under the Wenphil and other similar cases, which ranges from P1,000 to P10,000, the amount was increased to "full backwages" computed from the time the employee was dismissed without due process until the decision finding the termination to be for cause had become final.

In November 2004, the Supreme Court made another modification to the prevailing doctrine. In Agabon & Agabon vs. NLRC, et al., there was a just cause for the dismissal

of the employees but there was no due process. The High Court said that the dismissal was valid, for which reason the employees were not entitled to reinstatement, but for not complying with due process, the employer had to pay the employees nominal damages in the amount of P30,000.

In the three cases mentioned above, the Supreme Court recognized the right of the employer to dismiss an employee for a cause. As long as there is just or authorized cause, the dismissal is always valid, regardless of the absence or presence of due process. This is a clear recognition of the right of the employer to discipline its erring employees as a measure of self-protection.

It should be noted, however, that while the dismissal is valid, the employer has to pay the dismissed employee, in varying amounts, for violating his right to due process. The prevailing rule now is that, the only relief available to the employee who is dismissed for a cause but without due process is the payment to him of nominal damages, as opposed to penal indemnity in Wenphil and compensatory damages inSerrano. The amount varies depending on the circumstances of each case. To the workers, regardless of how our Court terms and justifies the amount that has to be paid, it will not matter. For them, this is again the era of "dismiss now, pay later."