View full case

RUBEN SERRANO v. NLRC

FACTS:

Ruben Serrano was hired by Isetann Department Store as a security checker and eventually became the head of the Security Checkers Section. In 1991, Isetann decided to phase out its security section and engage an independent security agency to cut costs. Serrano filed a complaint for illegal dismissal, among other grievances, which was initially ruled in his favor by the Labor Arbiter. However, the NLRC reversed the decision, stating that the hiring of an independent security agency was a valid business decision and ordered Serrano to be given separation pay instead. Serrano filed a petition for review on the NLRC's resolutions.

The petitioner argues that the termination of the Security Checkers Section does not fall under any authorized causes for dismissal. However, the Court cited previous cases where termination due to the engagement of independent contractors was upheld, stating that management has the prerogative to decide whether to perform services through its personnel or outside agencies. The petitioner failed to prove that the termination was not a bona fide decision by management.

The Court held that the termination was for an authorized cause, which is redundancy, entitling the petitioner to separation pay. The Court also addressed the employer's violation of the notice requirement under Article 283 and ordered the employer to pay the petitioner indemnity for not providing written notice before termination.

In another issue, the petitioner was found to have dismissed the private respondent without notice and hearing, in violation of implementing rules requiring due process. While the dismissal was for a just cause, the employer must still be sanctioned for non-compliance with due process. The court imposed a sanction of P1,000.00 for the violation and acknowledged the need for re-examining the current sanctions for such violations.

ISSUES:

  1. Whether the failure of the employer to give a formal notice and conduct an investigation before dismissing the employee constitutes a violation of the notice requirement.

  2. Whether the violation of the notice requirement renders the dismissal null and void.

  3. Does the employer's failure to comply with the notice requirement in the termination of employment constitute a denial of due process?

  4. Does the employee's failure to give written notice to the employer of his resignation result in the nullity of the resignation?

  5. Whether an employee who was terminated for an authorized cause should be reinstated even if there was a failure to comply with the 30-day notice requirement.

  6. Whether an employee who was terminated for a just cause under Article 282 should be reinstated.

RULING:

  1. Yes, the failure of the employer to give a formal notice and conduct an investigation before dismissing the employee constitutes a violation of the notice requirement.

  2. No, the violation of the notice requirement does not render the dismissal null and void.

  3. The employer's failure to comply with the notice requirement does not constitute a denial of due process but only makes the termination of employment ineffective. The consequence of such failure is that the employer becomes liable for damages, specifically the amount of wages the employee would have received if proper notice was given.

  4. The employee's failure to give written notice of resignation to the employer does not render the resignation void, but only makes the employee liable for damages. The disparity in legal treatment between the employer's failure to comply with the notice requirement and the employee's failure to give notice is justified by law.

  5. If it is established that the termination of employment was due to an authorized cause, the employee should not be ordered reinstated even if there is a failure to comply with the 30-day notice requirement. Instead, the employee is entitled to receive separation pay in accordance with Article 283. Additionally, the employee should be paid full backwages if there was a lack of written notice at least 30 days in advance.

  6. If an employee was dismissed for any of the just causes stated in Article 282, reinstatement is not appropriate. However, the employee is entitled to backwages from the time of termination until it is determined whether the termination was for a just cause.

PRINCIPLES:

  • The dismissal of an employee must be for just or authorized cause and after due process.

  • In cases where the employer fails to comply with the notice requirement, the dismissal is ineffectual and the employee is entitled to full backwages until it is determined that the dismissal was for a just cause.

  • The violation of the notice requirement does not amount to a denial of due process resulting in the nullity of the employee's dismissal or layoff.

  • The Due Process Clause of the Constitution is a limitation on governmental powers and does not apply to the exercise of private power, such as the termination of employment under the Labor Code.

  • Notice and hearing are not required under the Due Process Clause before the termination of employment, as the purpose for requiring a 30-day written notice is to give the employee time to prepare for the eventual loss of his job and the Department of Labor and Employment (DOLE) an opportunity to determine whether economic causes exist justifying the termination.

  • Compliance by the employer with the notice requirement before dismissing an employee does not foreclose the latter's right to question the legality of his dismissal.

  • The notice requirement in the Labor Code originated from the Spanish Code of Commerce and was intended to provide an opportunity for both the employer and employee to find replacements or substitute employment.

  • The employer cannot be expected to be an entirely impartial judge of his own cause, and thus, the notice requirement cannot be considered a requirement of the Due Process Clause.

  • The grievance machinery, established by agreement of the employer and employees, is different from dismissals and layoffs by employers alone and may provide impartial judges to hear employee complaints.

  • Lack of notice in the termination of employment only makes the termination ineffectual and does not render it invalid.

  • The notice requirement in Article 282-283 of the Labor Code is not a requirement of due process but a procedure to be followed before the termination of employment can be effective. Failure to comply with this requirement makes the termination merely ineffectual and renders the employer liable for damages.

  • The absence of a just cause for termination makes the dismissal of an employee illegal. Only if the termination is not for any of the causes provided by law is it considered illegal, entitling the employee to reinstatement and backwages.

  • Failure to comply with the notice requirement in the termination of employment results in the payment of backwages for the period when the employee is considered not to have been effectively dismissed.

  • The employer should not be compelled to keep in employment an employee guilty of serious offenses such as theft or attempted harm against the employer. The law protects the rights of the laborer but does not authorize oppression or self-destruction of the employer.

  • In cases of termination due to an authorized cause, the employee should be granted separation pay instead of reinstatement.

  • Failure to comply with the 30-day notice requirement necessitates the payment of full backwages to the employee.

  • Dismissal for a just cause does not warrant reinstatement, but backwages should be paid from the time of termination until the validity of the dismissal is determined.