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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, on the other hand, 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. Financial assistance is granted as a measure of equity or social justice, and is in the nature or takes the place of severance compensation. (Libcap Marketing Corp. V. Lanny Jean B. Baquial, G.R. No. 192011, June 30, 2014)
In the realm of labor law, the resolution of disputes between employers and employees often involves a complex interplay of legal principles and humanitarian considerations. Nominal damages and financial assistance are two mechanisms designed to address grievances and provide remedies in labor cases. While nominal damages serve as a symbolic acknowledgment of a legal wrong, financial assistance aims to offer practical support to affected workers.
Due Process and Nominal Damages
In the case of Zenaida Paz V. Northern Tobacco Redrying Co., Inc. (G.R. No. 199554, February 18, 2015), the Court held:
The Labor Code requires employers to comply with both procedural and substantive due process in dismissing employees. Agabon v. National Labor Relations Commission discussed these rules and enumerated the four possible situations considering these rules:
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.
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.
In the first situation, the dismissal is undoubtedly valid and the employer will not suffer any liability.
In the second and third situations where the dismissals are illegal, Article 279 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 the fourth situation, 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 noncompliance with the procedural requirements of due process.
Hence the award of nominal damages.
Nominal damages are “adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.” (Dela Torre v. Twinstar Professional Protective Services, Inc., G.R. No. 222992, June 23, 2021)
Financial Assistance
In the case of Zenaida Paz V. Northern Tobacco Redrying Co., Inc. (G.R. No. 199554, February 18, 2015), the Court held:
We are not unmindful of the rule that financial assistance is allowed only in instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Neither are we unmindful of this Court’s pronouncements in Arc-Men Food Industries Corporation v. NLRC, and Lemery Savings and Loan Bank v. NLRC, where the Court ruled that when there is no dismissal to speak of, an award of financial assistance is not in order. But we must stress that this Court did allow, in several instances, the grant of financial assistance. In the words of Justice Sabino de Leon, Jr., now deceased, financial assistance may be allowed as a measure of social justice and exceptional circumstances, and as an equitable concession. The instant case equally calls for balancing the interests of the employer with those of the worker, if only to approximate what Justice Laurel calls justice in its secular sense.
Nominal damages and financial assistance
In the case of Libcap Marketing Corp. V. Lanny Jean B. Baquial (G.R. No. 192011, June 30, 2014), the Court held:
The law and jurisprudence, on the other hand, 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. Financial assistance is granted as a measure of equity or social justice, and is in the nature or takes the place of severance compensation.
On the other hand, nominal damages “may be awarded to a plaintiff whose right has been violated or invaded by the defendant, for the purpose of vindicating or recognizing that right, and not for indemnifying the plaintiff for any loss suffered by him. Its award is thus not for the purpose of indemnification for a loss but for the recognition and vindication of a right.” The amount of nominal damages to be awarded the employee is addressed to the sound discretion of the court, taking into consideration the relevant circumstances. Nevertheless, while the amount of damages is left to the discretion of the court
Indeed, the mechanisms of nominal damages and financial assistance serve vital but distinct purposes. Nominal damages provide a formal recognition of legal rights and violations, affirming the principle that rights are not contingent upon economic loss. Financial assistance offers practical support to employees, addressing financial hardships and reinforcing the importance of equitable treatment. Together, these remedies embody a holistic approach to labor justice, balancing legal accountability with humanitarian support.
By understanding and effectively applying both nominal damages and financial assistance, legal systems and employers can foster a fairer and more supportive environment for workers. This balance not only upholds legal principles but also addresses the real-life challenges faced by employees, contributing to a more just and compassionate labor landscape.
Related Article/s:
Employer’s Non-Compliance with Procedural Due Process
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