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    Serrano v. NLRC

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    Lisley Gem Amores
    1) Ruben Serrano was head of security for Isetann Department Store but was terminated without notice when the store decided to phase out its security section for cost-cutting reasons. 2) The NLRC ruled that phasing out the security section was a legitimate business decision by Isetann. However, Isetann failed to provide the required one month notice of termination to Serrano. 3) While violation of the notice requirement is a sanctionable offense, it does not nullify an otherwise valid termination based on an authorized cause like redundancy. The purpose of notice is to prepare the employee, not afford due process. 4) Considering terminations without notice as automatically

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    Serrano v. NLRC

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    Lisley Gem Amores
    60 views2 pages
    1) Ruben Serrano was head of security for Isetann Department Store but was terminated without notice when the store decided to phase out its security section for cost-cutting reasons. 2) The NLRC ruled that phasing out the security section was a legitimate business decision by Isetann. However, Isetann failed to provide the required one month notice of termination to Serrano. 3) While violation of the notice requirement is a sanctionable offense, it does not nullify an otherwise valid termination based on an authorized cause like redundancy. The purpose of notice is to prepare the employee, not afford due process. 4) Considering terminations without notice as automatically

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    SERRANO V. NLRC

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    1) Ruben Serrano was head of security for Isetann Department Store but was terminated without notice when the store decided to phase out its security section for cost-cutting reasons. 2) The NLRC ruled that phasing out the security section was a legitimate business decision by Isetann. However, Isetann failed to provide the required one month notice of termination to Serrano. 3) While violation of the notice requirement is a sanctionable offense, it does not nullify an otherwise valid termination based on an authorized cause like redundancy. The purpose of notice is to prepare the employee, not afford due process. 4) Considering terminations without notice as automatically

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    60 views2 pages

    Serrano v. NLRC

    Uploaded by

    Lisley Gem Amores
    1) Ruben Serrano was head of security for Isetann Department Store but was terminated without notice when the store decided to phase out its security section for cost-cutting reasons. 2) The NLRC ruled that phasing out the security section was a legitimate business decision by Isetann. However, Isetann failed to provide the required one month notice of termination to Serrano. 3) While violation of the notice requirement is a sanctionable offense, it does not nullify an otherwise valid termination based on an authorized cause like redundancy. The purpose of notice is to prepare the employee, not afford due process. 4) Considering terminations without notice as automatically

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    D - #1 (Due Process Requirements in termination) collective bargaining agreement approved in 1990.

    Such an assertion is not


    CASE DIGEST by: Amores, Lisley Gem sufficient basis for concluding that the termination of petitioner's employment
    was not a bona fide decision of management to obtain reasonable return from
    SERRANO V. NLRC its investment, which is a right guaranteed to employers under the Constitution.
    January 27, 2000 Indeed, that the phase-out of the security section constituted a "legitimate
    business decision" is a factual finding of an administrative agency which must
    FACTS: be accorded respect and even finality by this Court since nothing can be found
    Ruben Serrano was the head of the Security Checkers Section of Isetann in the record which fairly detracts from such finding. Accordingly, we hold that
    Department Store. Sometime in 1991, as a cost-cutting measure, private the termination of petitioner's services was for an authorized cause, i.e.,
    respondent decided to phase out its entire security section and engage the redundancy. Hence, pursuant to Art. 283 of the Labor Code, petitioner should
    services of an independent security agency. For this reason, the management be given separation pay at the rate of one month pay for every year of service.
    wrote to Ruben reiterating the company’s verbal notice to you of your
    termination by reason of its retrenchment program.
    2.) YES.
    On December 3, 1991, Ruben then to file a complaint for illegal dismissal,
    illegal layoff, unfair labor practice, underpayment of wages, and nonpayment of Art. 283 also provides that to terminate the employment of an employee for any
    salary and overtime pay. of the authorized causes the employer must serve "a written notice on the
    workers and the Department of Labor and Employment at least one (1) month
    LA – rendered a decision finding petitioner to have been illegally dismissed; before the intended date thereof." In the case at bar, petitioner was given a
    ruled that, among others, Isetann failed to establish that it had retrenched its notice of termination on October 11, 1991. On the same day, his services were
    security section to prevent or minimize losses to its business and that private terminated. He was thus denied his right to be given written notice before the
    respondent failed to accord due process to petitioner. termination of his employment, and the question is the appropriate sanction for
    the violation of petitioner's right.
    NLRC – reversed LA’s ruling; held that the phase-out of private respondent's
    security section and the hiring of an independent security agency constituted a We agree with our esteemed colleagues, Justices Puno and Panganiban, that
    legitimate business decision we should rethink the sanction of fine for an employer's disregard of the notice
    requirement. We do not agree, however, that disregard of this requirement by
    an employer renders the dismissal or termination of employment null and void.
    ISSUE(S): Such a stance is actually a reversion to the discredited pre-Wenphil rule of
    1.) Whether or not the abolition of the Security Checkers Section and the ordering an employee to be reinstated and paid backwages when it is shown
    employment of an independent security agency fall under any of the authorized that he has not been given notice and hearing although his dismissal or layoff is
    causes for dismissal later found to be for a just or authorized cause. Such rule was abandoned in
    2.) Whether or not there is a sanction for violation of the notice requirement Wenphil because it is really unjust to require an employer to keep in his service
    when termination is based on an authorized cause? one who is guilty, for example, of an attempt on the life of the employer or the
    3.) Whether or not the violation of Notice requirement not a denial of due latter's family, or when the employer is precisely retrenching in order to prevent
    process losses. Following the Wenphil Doctrine, an infraction of the second requirement
    4.) Whether or not considering dismissals/layoffs without prior notice as illegal results to a sanction for failure to give a formal notice and conduct an
    unjust investigation as required by law before dismissing an employee from
    employment. The fines imposed for violations of the notice requirement have
    varied from P1,000.00 to P2,000.00 to P5,000.00 to P10,000.00.
    RULING:

    1.) YES. 3.) NO. The violation of Notice requirement is not a denial of due process.

    Under Article 283, the employer may also terminate the employment of any There are three reasons why violation by the employer of the notice
    employee due to the installation of labor-saving devices, redundancy, requirement cannot be considered a denial of due process resulting in the
    retrenchment to prevent losses or the closing or cessation of operations of the nullity of the employee's dismissal or layoff.
    establishment or undertaking unless the closing is for the purpose of
    circumventing the provisions of this Title, by serving a written notice on the, 1.) The Due Process Clause of the Constitution is a limitation on
    workers and the Department of Labor and Employment at least one (1) month governmental powers. It does not apply to the exercise of private
    before the intended date thereof . In case of termination due to the installation of power, such as the termination of employment under the Labor
    labor-saving devices or redundancy, the worker affected thereby shall be Code.
    entitled to a separation pay equivalent to at least one (1) month pay or to at 2.) The purpose for requiring a 30-day written notice before an
    least one (1) month pay for every year of service, whichever is higher. In case employee is laid off is not to afford him an opportunity to be heard on
    of retrenchment to prevent losses and in cases of closure or cessation of any charge against him, for there is none. The purpose rather is to
    operations of establishment or undertaking not due to serious business losses give him time to prepare for the eventual loss of his job and the
    or financial reverses, the separation pay shall be equivalent to at least one (1) DOLE an opportunity to determine whether economic causes do
    month pay or at least one-half (1/2) month pay for every year of service, exist justifying the termination of his employment.
    whichever is higher. A fraction of at least six (6) months shall be considered as 3.) The notice requirement under Art. 283 cannot be considered a
    one (1) whole year. requirement of the Due Process Clause is that the employer cannot
    really be expected to be entirely an impartial judge of his own cause.
    . . [While there] should be mutual consultation, eventually deference is to be
    paid to what management decides." Consequently, absent proof that We hold, therefore, that, with respect to Art. 283 of the Labor Code, the
    management acted in a malicious or arbitrary manner, the Court will not employer's failure to comply with the notice requirement does not constitute a
    interfere with the exercise of judgment by an employer. denial of due process but a mere failure to observe a procedure for the
    termination of employment which makes the termination of employment merely
    In the case at bar, we have only the bare assertion of petitioner that, in ineffectual.
    abolishing the security section, private respondent's real purpose was to avoid
    payment to the security checkers of the wage increases provided in the
    4.) YES. Considering dismissals/layoffs without prior notice as illegal is unjust.

    The refusal to look beyond the validity of the initial action taken by the employer
    to terminate employment either for an authorized or just cause can result in an
    injustice to the employer. For not giving notice and hearing before dismissing
    an employee, who is otherwise guilty of, say, theft, or even of an attempt
    against the life of the employer, an employer will be forced to keep in his
    employ such guilty employee. This is unjust.

    It is true the Constitution regards labor as "a primary social economic force."
    But so does it declare that it "recognizes the indispensable role of the private
    sector, encourages private enterprise, and provides incentives to needed
    investment.” The Constitution bids the State to "afford full protection to labor."
    But it is equally true that "the law, in protecting the right's of the laborer,
    authorizes neither oppression nor self-destruction of the employer." And it is
    oppression to compel the employer to continue in employment one who is guilty
    or to force the employer to remain in operation when it is not economically in his
    interest to do so.

    In sum, we hold that if in proceedings for reinstatement under Art. 283, it is


    shown that the termination of employment was due to an authorized cause,
    then the employee concerned should not be ordered reinstated even though
    there is failure to comply with the 30-day notice requirement. Instead, he must
    be granted separation pay in accordance with Art. 283.

    - If termination due to the installation of labor-saving devices or


    redundancy, entitled to a separation pay equivalent to at least his one (1)
    month pay or to at least one month for every year of service, whichever is
    higher.
    - Retrenchment and closures or cessation of business = 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 months shall be considered one (1) whole year.

    If the employee's separation is without cause, instead of being given separation


    pay, he should be reinstated. In either case, whether he is reinstated or only
    granted separation pay, he should be paid full backwages if he has been laid off
    without written notice at least 30 days in advance.

    On the other hand, with respect to dismissals for cause under Art. 282, if it is
    shown that the employee was dismissed for any of the just causes mentioned in
    said Art. 282, then, in accordance with that article, he should not be reinstated.
    However, he 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 of his employment without legal effect.

    WHEREFORE, the petition is GRANTED and the resolution of the National


    Labor Relations Commission is MODIFIED by ordering private respondent
    Isetann Department Store, Inc. to pay petitioner separation pay equivalent to
    one (1) month pay for every year of service, his unpaid salary, and his
    proportionate 13th month pay and, in addition, full backwages from the time his
    employment was terminated on October 11, 1991 up to the time the decision
    herein becomes final. For this purpose, this case is REMANDED to the Labor
    Arbiter for computation of the separation pay, backwages, and other monetary
    awards to petitioner.

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