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The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
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
“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.”
Related article: WHAT IS THE RIGHT TO SECURITY OF TENURE?
Under the 1987 Constitution, consistent with labor laws and jurisprudence, every employee is entitled to security of tenure (Section 3, Article XIII, 1987 Constitution). This means that an employer shall not dismiss an employee except for a just or authorized cause and only after due process is observed. (Distribution & Control Products, Inc. v. Jeffrey Santos, G.R. No. 212616, July 10, 2017)
The law says:
ART. 292. [277] Miscellaneous Provisions
(b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. The Secretary of the Department of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass layoff. (Emphasis supplied.)
ART. 297. [282] Termination by Employer. – An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and
(e) Other causes analogous to the foregoing.
ART. 298. [283] Closure of Establishment and Reduction of Personnel. – The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.
ART. 299. [284] Disease as Ground for Termination. – An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole year.
Jurisprudence says:
In the case of Redentor Agustin v. Alphaland Corporation, et. al., (G.R. No. 218282, September 09, 2020), the Supreme Court ruled that termination of the services of an employee requires the observance of the two-fold due process, to wit:
“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.”
In the case of Perez v. Philippine Telegraph (G.R. No. 152048, April 07, 2009), the Supreme Court held that as regards procedural due process, a formal hearing or conference is no longer mandatory. It becomes mandatory only when requested by the employee in writing, when substantial evidentiary disputes exist, or when a company rule or practice requires it, or when similar circumstances justify it.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding taxation and taxpayer’s remedies, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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