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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
The law and jurisprudence allow the award of nominal damages in favor of an employee in a case where a valid cause for dismissal exists but the employer fails to observe due process in dismissing the employee. (Libcap Marketing Corporation v. Baquial, G.R. No. 192011, June 30, 2014)
The Labor Code protects the constitutional rights of workers such as just and humane conditions of work, equal work opportunities, self-organization, and security of tenure.
Article 294 of the Labor Code provides:
“In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized under the Labor Code. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.”
The Omnibus Rules Implementing the Labor Code, as amended by DOLE Department Order No. 147, series of 2015 (DO 147-15), provides the procedure for terminating an employee, to wit:
“Section 5. Due Process of Termination of Employment. In all cases of termination of employment, the following standards of due process laid down in Article 299 (b) of the Labor Code, as amended, and settled jurisprudence on the matter, must be observed as follows:
5.1. Termination of Employment based on Just Causes. As defined in Article 297 of the Labor Code, as amended, the requirement of two written notices served on the employer shall observe the following:
a. The first written notice should contain:
- The specific causes or grounds for termination as provided for under Article 297 of the Labor Code, as amended, and company policies, if any;
- Detailed narration of the facts and circumstances that will serve as basis for the charge against the employee. A general description of the charge will not suffice; and
- A directive that the employee is given opportunity to submit a written explanation within a reasonable period.
“Reasonable period” should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employee an opportunity to study the accusation, consult or be represented by a lawyer or union officer, gather data and evidence, and decided on the defenses against the complaint.”
b. After serving the first notice, the employer should afford the employee ample opportunity to be heard and to defend himself/herself with the assistance of his/her representative if he/she so desires, as provided in Article 299 (b) of the Labor Code, as amended.
“Ample Opportunity to be heard” means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him/her and submit evidence in support of his/her defense. 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. After determining that termination of employment is justified, the employer shall serve the employee a written notice of termination indicating that (1) all the circumstances involving the charge against the employee have been considered; and (2) the grounds have been established to justify the severance of their employment.
The foregoing notices shall be served personally to the employee or to the employee’s last known address.” (Emphasis supplied.)
As held by the Supreme Court in the case of Redentor Agustin v. Alphaland Corporation, et al. (G.R. No. 218282, September 9, 2020), termination of the services of an employee requires the observance of the two-fold due process: (1) substantive due process; and (2) procedural due process.
Jurisprudence says:
“Dismissal of regular employees by the employer requires the observance of the two-fold due process, namely: (1) substantive due process; and (2) procedural due process.
Substantive due process means that the dismissal must be for any of the: (1) just causes provided under Article 297 of the Labor Code or the company rules and regulations promulgated by the employer; or (2) authorized causes under Article 298 and 299 thereof.
Procedural due process means that the employee must be accorded due process required under Article 292(b) of the Labor Code, the elements of which are the twin-notice rule and the employee’s opportunity to be heard and to defend himself.”
In the case of Brown Madonna Press, Inc. v. Casas (G.R. No. 200898, June 15, 2015), the Supreme Court held that two separate inquiries must be made in resolving illegal dismissal cases: first, whether the dismissal had been made in accordance with the procedure set in the Labor Code; and second, whether the dismissal had been for just or authorized cause. As such, the Supreme Court made this discussion:
“In determining whether an employee’s dismissal had been legal, the inquiry focuses on whether the dismissal violated his right to substantial and procedural due process. An employee’s right not to be dismissed without just or authorized cause as provided by law, is covered by his right to substantive due process. Compliance with procedure provided in the Labor Code, on the other hand, constitutes the procedural due process right of an employee.
The violation of either the substantive due process right or the procedural due process right of an employee produces different results. Termination without a just or authorized cause renders the dismissal invalid, and entitles the employee 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.
An employee’s removal for just or authorized cause but without complying with the proper procedure, on the other hand, does not invalidate the dismissal. It obligates the erring employer to pay nominal damages to the employee, as penalty for not complying with the procedural requirements of due process.
Thus, two separate inquiries must be made in resolving illegal dismissal cases: first, whether the dismissal had been made in accordance with the procedure set in the Labor Code; and second, whether the dismissal had been for just or authorized cause.”
What is the effect if there is no valid cause of termination of the services of an employee?
Where there is no showing of clear, valid, and legal cause of termination, the law considers it a case of illegal dismissal. (General Baptist Bible College v. National Labor Relations Commission, G.R. No. 85534, March 05, 1993)
So, what if the employer failed to observe procedural due process? Does it invalidate the dismissal?
In the case of Elsie Lavador v. J Marketing Corporation (G.R. No. 157757m June 28, 2005), the Supreme Court upheld the dismissal of the employee but made the employer liable for non-compliance with the procedural requirements of due process. The Supreme Court ruled that:
“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.” (Emphasis supplied.)
The violation of an employee’s right to statutory due process by the employer warrants the payment of indemnity in the form of nominal damages.
The law and jurisprudence allow the award of nominal damages in favor of an employee in a case where a valid cause for dismissal exists but the employer fails to observe due process in dismissing the employee. (Libcap Marketing Corporation v. Baquial, G.R. No. 192011, June 30, 2014)
Under the Civil Code, nominal damages refer to the damages adjudicated in order that a right, which has been violated or invaded, may be vindicated or recognized.
Taken into the context of labor law, nominal damages are awarded to an employee who was dismissed for a valid cause but the process was not observed. The purpose of nominal damages in labor law is to vindicate or recognize the violation of the employee’s right.
It must be noted that the amount of damages is addressed to the sound discretion of the court, taking into account the relevant circumstances of each case.
Related Articles:
Due Process in Labor Proceedings
What are the procedural requirements in dismissing an employee based on just causes?
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