PROCEDURAL DUE PROCESS

Procedural Due Process

- kind of due process provided for by law, specifically by LC;
- the more accurate term is statutory due process

Statutory Due process

 Art. 292 (b), LC
 Par (d) Section 1, Rule 1, Book VI of Rules Implementing Labor Code

Statutory due process is different from Constitutional due process.

In the Constitution:
“No person shall be deprived of life, liberty or property without due process of law.”
- NOT the due process referred to in Labor cases!

Contractual Due Process

Case: Abott v. Alcaraz;
 CDP is that part of the procedure expressly provided for in the employment
contract or company rules
 The procedures therein prescribed must be observed on top of what is under Art.
292 (b), LC

Procedural Due Process

JUST CAUSE Termination

a. Twin Notice Rule

1. First written notice – clear statement of charges for which an

employee is being asked to reply to
2. Conduct of investigation – (ideally there is an investigation, not
always, Perez Case)
3. Second written notice
a. provides for penalty to be imposed written with clarity
b. grounds for imposition of penalty explained

Case: King of Kings Transport v. Mamac (2007)

For the first written notice:

a. The specific grounds for which an employee is being asked to explain,
must be stated
b. Date and Time when the offenses were committed
c. Persons who witnessed the commission
 Explanation must be submitted within 5 days.
-- intended to give the employee the opportunity to intelligently answer the
charges and adduce evidence in his defense
After the first written notice, Hearing is required.
a. Employee will have opportunity to explain and rebut charges
b. Employee may adduce evidence in his behalf
c. Employee may cross-examine witnesses against him
d. Employee must be assisted by a counsel or a representative of his choice

Service of second written notice

a. the findings of the administrative body which heard the charges are found
b. states the law or company rules upon which the termination of
employment was based

BOTH the first and second written notice must be actually received by the
employee.
- Usually sent via PHILPOST so that there is a return card.

Case: Perez v. PT&T (2009)

- There is no need for a full-blown hearing.
- What is necessary is that the employee is given an opportunity to be heard. A
verbal directive for him to submit an explanation would be sufficient.

- The hearing will ONLY be conducted under any of the following conditions:
1. Employee requested in writing for the conduct of a hearing
2. There are substantial evidentiary disputes that exist
3. When company rules and regulations require it
4. Analogous circumstances

Case: Lopez v. Alturaz (2011)

 The right to counsel can only be asserted during custodial investigation.
Exceptions:
1. Employee requested for assistance of a counsel (in writing)
2. Employee manifested the desire for a formal hearing (in writing)

Case: Punzal v. RTSI (2007)

 The constitutional rights or liberties are not applicable to company level due
process (ex. right to counsel, right against unreasonable searches and seizures)
Evolution of Due Process

1. Wenphil v. NLRC (1989)

- First case that abandoned the old doctrine.
- This is the OLD Doctrine: “If an employee was dismissed on just / authorized
cause but without due process, then employee is ILLEGALLY DISMISSED.”
- SC: “It is not fair to hold er liable for illegal dismissal if the employee has done
something detrimental to the interest of er. However, the employee’s right to due
process must be recognized. Thus, there must be award of indemnity.
- Php 1,000 indemnity was awarded.

2. Ruben Serrano v. NLRC

- “Ineffectual Dismissal” – termination with just / authorized cause but without
observance of due process
- employee should not be reinstated. Rather, he should be paid Separation Pay
and Back wages
- NEVER use the term Ineffectual Dismissal – NO LONGER the term used to
describe such.

3. Sps. Agabon (2004)

- Abandoned the concept of Ineffectual Dismissal.
- “Nominal Damages” – the nature of the award of nominal damages is for the
purpose of recognizing a right and not for the purpose of indemnifying a loss
- Php 30, 000 nominal damages awarded for Just Cause termination

4. Jaca v. Pacot (2005)

- Php 50,000 nominal damages awarded for Authorized Cause termination

Why?
- In just cause termination, the employee has done something that warranted his
dismissal.
- In authorized cause termination, the employee has nothing to do with his
dismissal.

DIFFERENT KINDS OF DISMISSAL

1. Actual Dismissal
- based on Just, Authorized, Analogous cause or violations of CBA or
Company Rules and Regulations
 2. Constructive Dismissal

Test to Determine whether the dismissal is Constructive:

a. First Kind
- “Whether a reasonable person in the employee’s position would have felt
compelled to give up his employment”

b. Second Kind
- The employee decided to stay and stomach the abuse. When he felt
unable to bear it, it is only then that the employee files a complaint for CD

Involuntary Resignation – due to serious insult, inhumane treatment

Demotion in Rank, Pay or Status

Principles (Constructive Dismissal):

Not every inconvenience, disruption, difficulty or disadvantage that an employee must

endure sustains a finding of CD.

It is the employer’s right to investigate employees particularly those involved with

allegations of Fraud. [Philspan Asia v. Pelayo (2018)]

Instances of Constructive Dismissal

a. Acts of disdain and hostile behavior, asked the employee to resign, patently
apathetic conduct towards the worker [Bayview v. Heloisa (2020)]

b. If the er committed unsubstantiated reduction of work hours on the pretext of

forestalling losses without establishing that losses have been sustained [Intec v.
CA (2016)]

c. Employer tore into pieces the employee’s time card [Ang v. San Joaquin Jr.
(2013)]

d. Employee’s functions was originally supervisory in nature were reduced without

valid grounds [Diwa v. De Leon (2018)]

e. Another employee is soon appointed to a position which the employer claims to

be abolished. While the original employee was transferred against her will to a
position which does not exist in the corporate structure [Ico v. Systems Tech
Institute (2014)]
 f. Constructive dismissal exists if the employee was sexually harassed by her
superior and her employer failed to act with promptness and sensitivity [LBC v.
Palco (2020)]

Instances where there is NO Constructive Dismissal

a. Where after the employer shouted, “Kung ayaw mo ng ginagawa mo, we can
manage!” the employee filed a resignation letter containing words of gratitude
[Rodriguez v. Park & Ride (2017)]

b. A resignation letter cannot be considered indicative of constructive dismissal if it

is submitted by an employee fully aware of its effects and implications.
[Panasonic v. Pecson (2019)]

c. Where an employee, who after violating company protocols, was given a chance
to resign and save face [Cosue v. Feritz (2017)]

RELIEFS FROM ILLEGAL DISMISSAL

Art. 294, LC:

1. Reinstatement without loss of seniority rights and other privileges
2. Full back wages inclusive of allowance
3. Other benefits and their monetary equivalent

From Jurisprudence:

1. Separation pay in lieu of reinstatement

- happens when the parties’ relationship is so strained; Whoever alleges that the
relationship is already strained has the burden of proving it
- Mere filing of a case is not a basis for a finding of strained relations
- If it would be impossible to reinstate the employee (the worker already retired,
department where he belonged had already been abolished, closure of business)

2. Nominal Damages

3. Salary for the unexpired portion of the contract

- For Fixed term, someone found to be actually a Fixed Term employee,

Contractual, Probationary employees, OFWs

4. Financial Assistance
- Not intended to take the place of reinstatement or backwages
- Cannot be given to employee dismissed on just cause
 - Awarded due to humanitarian reasons (for reasons of: health of employee, length
of service, no record of infraction)

5. Damages
- Not awarded as a matter of course; MUST be proven by evidence higher than
Substantial evidence. MUST BE CONCRETE EVIDENCE

6. Attorney’s Fees
- When there is withholding of wages or bad faith can be established
- Not awarded as a matter of course

7. Legal Interest on other Awards 6% per annum (Nacar v. Gallery Frames)

TYPES OF REINSTATEMENT

1. Reinstatement pending Appeal (Art. 229, LC)

- Ordered by LA who has found that the termination of the employment is illegal
- Immediately executory; NO need for Writ of Execution! This is not stopped by the
Perfection of an Appeal
 Unless the employer stubbornly refuses to comply with the order of
reinstatement.

Who can order Reinstatement pending appeal?

- LA and Voluntary Arbitrators

2. Reinstatement upon Finality of Decision (Art. 294, LC)

Reinstatement pending Appeal Reinstatement upon Finality of

(Art. 229, LC) Decision (Art. 294, LC)

Employer has an option whether to

reinstate in the Pay roll or to reinstate Does not have the same option
Physically
Writ of Execution has to be issued (only
Immediately executory
upon Finality of decision)
May be done during appeal
Does not apply when the dismissal is
Legal

3. Reinstatement of Striking or Lockout Workers

- When SOLE issues a Return-to-Work Order or exercises his assumption /
certification power under Art. 278, LC
 4. Reinstatement with respect to the power of SOLE to suspend the effect of
Termination (Art. 292 (b), LC)
- When SOLE suspends termination in an industry indispensable to national
interest and there is a brewing labor dispute, the suspension of termination is
temporary in nature

5. Reinstatement after Bona Fide Cessation of Operations (Art. 301, LC)

6. Reinstatement without or with Limited Back wages

a. Happens when penalty of dismissal is too harsh; or
b. No penalty of dismissal has been proven

Seniority Right
- fiction of law where there is continuity of employment despite the dismissal;
dismissal did not interrupt the period of employment

Principles (Reinstatement)

Payroll Reinstatement
- associate with reinstatement pending appeal

Case: Garcia v. PAL (2009)

If the case was subsequently decided in favor of employer, the payroll reinstated
employee has NO duty to return the salary he received

In Section 11, Rule 18 of 2011 NLRC Rules of Procedure, while there is a principle of
Restitution in case of reversal, this kind of restitution excludes the reimbursement of
reinstatement wages received pending appeal.

If the decision has been reversed, and no collection has been done, collection can still
be done.

Requirements before collection can be made:

1. Actual delay is attributable to the employer
2. No delay on the part of the sheriff in the enforcement of the reinstatement
3. The delay was not due to employee’s act [See: Bergonio v. SEAA (2014)]

Reinstatement must be to the Same or Substantially equivalent position.

Case: Lim v. HMR (2014)

- Employee failed to report back when he was ordered reinstated pending
appeal. His reason was valid.
Restorative Reinstatement for Reason of Equity and Compassionate Justice (Art. 229
does not apply. This is not reinstatement pending appeal)

Ex: employee was ordered reinstated due to length of service with no derogatory record

Principles: Separation Pay

Separation pay is paid in lieu of reinstatement

Case: Dumapis v. Lepanto

Computation of Separation Pay

- 1 month pay for every year of service

- Computed from time of employment up to the finality of the decision
- Salary rate prevailing at the Finality of the decision shall be the basis

Separation Pay may also be granted to an employee dismissed for causes other than
just causes or any act reflecting his moral character

BACKWAGES
– compensation that should have been earned by the employee but were lost due to his
illegal dismissal

Case: Dumapis v. Lepanto

Components of Back wages
Includes all salary increases and benefits granted under the law and other government
issuances (wage orders issued by RTWPB)
1. Those arising from CBA, employment contracts, established company policies
and practices, and analogous sources which the employees would have been
entitled to had they not been illegally dismissed

What are excluded from back wages?

Salary increases and other benefits which are contingent or dependent on variables
such as:
a. employee’s merit increase,
b. longevity,
c. company’s financial status
NOTE: There is no disturbance of final executory decision as what is being dealt only is
Execution particularly on the mathematical computation of what an illegally dismissed
employee is entitled to.

What if Reinstatement Pending Appeal was refused?

- Back wages will continue to run even after finality of decision.

Not violative of Immutability of Judgment Rule

Reason: It is part of the residual power of Labor Tribunal to update the mathematical
computation of backwages and separation pay if no payment has been made. (END of
Dumapis v. Lepanto case discussion)

PRESCRIPTION

Cause of Action Prescription

ULP 1 year (Art. 305, LC)

3 years from the time the cause of action

accrued
Money claims cognizable by LA, RD, or
filed by local or OFWs
Note: Service incentive leave claims
accrue from the Rejection by employer

Violations of RTSO, other than ULP 3 years (Art. 305, LC)

If the strikes or lockouts resulted to illegal

dismissal = it shall prescribe in 4 years
Strikes and Lockouts
(Art. 1146, NCC) See also: Callanta v.
Carnation

Illegal Dismissal 4 years (Art. 1146, NCC)

Cases:

IBC v. Panganiban
- The prescriptive period for the claim of unpaid commission by Panganiban
was interrupted by:
1. Filing of complaint before regular courts under Art. 1155, NCC
2. Written extrajudicial demand served by Mr. Panganiban to IBC
3. Written acknowledgment of the debt by the debtor
Montero v. Times
- Complaint for illegal dismissal filed after 4 years but was interrupted by an
earlier action but which he subsequently withdrew.

Accessory Specialist v. Alabanza

- Alabanza had several claims but the employer told him to wait and allow
the er to pay the rank-and-file employees first. He was assured and he
waited patiently.
- After 5 years, case for money claims was filed.

Promissory Estoppel
- once a promise was given and such promise actually induced the
employee not to pursue his claim, the employer has no other option but to
comply with his promise.